Ashton & Reid on Clubs and Associations 9781526505163, 9781526505187, 9781526505194

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Ashton & Reid on Clubs and Associations Third edition

Ashton & Reid on Clubs and Associations Third edition David Ashton MA (Oxon), FCIArb, C.Arb Barrister and Chartered Arbitrator

Paul W Reid MA (Cantab) Barrister and Recorder

Ian Snaith BA, MA Solicitor

BLOOMSBURY PROFESSIONAL Bloomsbury Publishing Plc 50 Bedford Square, London, WC1B 3DP, UK BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc Copyright © David Ashton, Paul W Reid and Ian Snaith 2020 David Ashton, Paul W Reid and Ian Snaith have asserted their rights under the Copyright, Designs and Patents Act 1988 to be identified as Authors of this work. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers. All UK Government legislation and other public sector information used in the work is Crown Copyright ©. All House of Lords and House of Commons information used in the work is Parliamentary Copyright ©. This information is reused under the terms of the Open Government Licence v3.0 (http://www.nationalarchives.gov.uk/doc/open-governmentlicence/version/3) except where otherwise stated. All Eur-lex material used in the work is © European Union, http://eur-lex.europa.eu/, 1998–2020. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN: PB: 978-1-52650-516-3 ePub: 978-1-52650-517-0 ePDF: 978-1-52650-519-4 Typeset by Evolution Design and Digital Ltd (Kent) To find out more about our authors and books visit www.bloomsburyprofessional.com. Here you will find extracts, author information, details of forthcoming events and the option to sign up for our newsletters

Foreword to the third edition

As the authors make clear, it is difficult enough to arrive at a clear legal definition of ‘club’, let alone to explain all the areas of law that are relevant to a club (which description includes an array of clubs, societies and associations). People come together for a wide variety of purposes to pursue common interests of many different kinds, and so the scope for a book on clubs potentially encompasses most forms of human activity where individuals join together for a specified purpose. Clubs, whether incorporated or unincorporated, are commonplace. A great many individuals will at some stage in their lives be a member of or involved with a club. Most people who join clubs to participate in sporting and other leisure activities expect their club to have less formality than they find in their daily work. There is tension between informality on the one hand and the legal rights and responsibilities attached to membership of a club on the other. In my experience over years of practical administration within sports’ clubs and involvement with the quasijudicial disciplinary procedures connected with competitive amateur sport, most ‘members’ have only a minimal understanding of the nature of the relationship, as a matter of law, with each other and as part of their club. That relationship, as well as the rights and obligations of clubs as entities themselves, are all part of ‘Club Law’. Club Law is not, and therefore should not be regarded as, merely of academic interest. It is of considerable practical importance. The authors recognise the challenges they have faced. They refer to their book as a ‘textbook’. In one sense this is a masterly understatement. The book is much more than a textbook because it achieves two important objectives: (1) it contains clear guidance and practical advice that is readily understandable by individuals who are involved in or with clubs, but do not have any professional background in the law; and (2) it sets out clearly the legal principles to be applied in numerous areas of the law relevant to clubs supported by a treasure-trove of references that are invaluable for any legal practitioner instructed to advise a client in such matters. Most clubs are, whether by design or in practice, ‘non-profit’ or little profit organisations. To pay for good professional advice is often an unaffordable luxury. This book contains clear guidance and practical advice which can be followed by non-lawyers involved in the management and administration of clubs without the need for the particular organisation to instruct lawyers or accountants. This is not to diminish the importance of obtaining professional advice where necessary, but to recognise the importance of a book such as this in guiding and educating individuals concerning their rights and responsibilities. After a first chapter that explains the meaning of a ‘club’, some historical background, the formation of a club, and the various structures that can be adopted, Chapter 2 begins with the fundamental statement that: ‘The club’s set of rules is the bedrock of club law’. To a practitioner in this area of the law, this may seem (and indeed ought to be) a statement of the obvious, but club rules are frequently inadequately drafted, rarely fully understood by members and their essential importance is commonly unrecognised by committees. This chapter alone v

Foreword to the third edition should be recommended reading for anyone, lawyer or layman alike, wishing to understand how and why rights and obligations flow from membership of a club. Numerous examples of useful practical advice, as well as legal scholarship, can be found throughout the book. For example, if I were asked by a director of my sports club, a company limited by guarantee, about the company accounts that should be kept or its potential tax liability, and before suggesting that the club should engage a lawyer or an accountant to provide formal advice, I would confidently refer him/her to the relevant parts of Chapter 17, ‘The Club’s Liability for Tax and Business Rates’. Of course, expert professional advice may become necessary, but the following of the clear guidance and advice contained in this book can avoid unnecessary expenditure of both time and money. The virtues of this book were clear in the previous two editions. The third edition is not merely an updating of the second edition, albeit that has been a substantial undertaking. Both the text and the appendices have been extended to ensure as comprehensive a coverage of the subject as is realistic given the breadth of the subject. The book deserves to be the initial ‘go to’ book available to any member of a club, or indeed a third party, seeking guidance and advice about the law relating to the management and administration of a club, as well as a valuable reference book for any professional practitioner advising on this area of the law. Gordon Nurse MA (Cantab) Middle Temple, Barrister, Deputy Chancery Master of the High Court of Justice, Disciplinary Commissioner of the International Hockey Federation, Chair of the England Hockey Appeal Panel Former international hockey player Radcliffe Chambers, Lincoln’s Inn, WC2 October 2020

vi

Preface

It is no wonder that many grandfather clocks say on their dial Tempus Fugit. It is difficult to believe that nearly a decade has passed since the second edition was published. We have to thank Bloomsbury Publishing for encouraging the third edition; accordingly, David Ashton, Paul Reid and Ian Snaith have acted as a team to bring this textbook up to date. And we take this opportunity to acknowledge the unfailing support and helpfulness of Ellie MacKenzie at Bloomsbury Publishing and our editor, Maria Skrzypiec, without which this edition would not have been achieved. The gathering together of people for social or specific activity began in the mid-17th century and simply comprised for a long while the unincorporated members’ club, aptly described in 1931 as ‘the most anomalous group of human beings known to the law’. In the early 21st century the club structures were much increased by statute law (see Table 1 at the end of Chapter 1). There is no doubt that social, leisure and professional activities have grown more complex in society but, many would say, these activities provide a more interesting and amiable role in their life. More club activity, however, means more responsibility for human behaviour and thus more control. The authors know of a well-known London club whose Rule Book in 2007 comprised 44 rules, whereas its Rule Book in 2017 comprised 144 rules. This says it all. The diversity and complexity of legal issues that can arise in clubs, societies and associations present numerous questions for those managing and advising the activities of these bodies. The problems range from the interpretation of rules to anti-discrimination legislation and the coronavirus pandemic. Legal issues can span alcohol licensing, charities, company law, employment, expulsion procedures, food control, litigation, meetings, promotion of lotteries, property law and taxation. Club law is therefore a very diverse topic and in modern society a person who has genuine legal expertise on so many fronts would be a rara avis. We are grateful to those learned specialists who have very kindly contributed to this edition. We therefore thank: ⦁

Jeremy Phillips QC of Francis Taylor Building, Temple EC4 (Chapter 9: Alcohol Licensing);

⦁

Gerald Gouriet QC of Francis Taylor Building, Temple EC4 (Chapter 12: Gaming & Lottery);

⦁

John Clargo of Harcourt Building, Lincoln’s Inn, WC2 (Chapter 15: Landlord & Tenant);

⦁

Sinclair Cramsie of 42 Bedford Row Chambers, WC1 (Chapter 16: Employment);

⦁

Peter Rayney FCA of Peter Rayney Tax Consulting Ltd (Chapter 17: Tax).

The reader will observe that in order to make the text more readable we have called into existence, as in the previous editions, a fictitious town called Basset in vii

Preface the county of Bassetshire. We have peopled this town with characters named in the famous song of Widecombe Fair: Tom Pearce, Tom Pearce, lend me your grey mare All along, down along, out along lea For I want to go to Widecombe Fair With Bill Brewer, Jan Stewer, Peter Gurney Peter Davey, Daniel Whiddon, Harry Hawke Old Uncle Tom Cobley and all. We have endeavoured to state the law as at 1 September 2020. David Ashton Paul Reid Ian Snaith October 2020

viii

Author biographies

David Ashton was a practising barrister at 13 King’s Bench Walk, Temple, EC4 until 2008 and is a former Deputy Queen’s Bench Master of the High Court of Justice. He practises as a chartered arbitrator. He was for many years Counsel to the Kennel Club. Paul W Reid is a practising barrister at Trinity Chambers in Newcastle Upon Tyne, Teesside and Leeds. He is a Recorder of the Crown Court and County Court. He was for many years Standing Counsel to the National Golf Clubs’ Advisory Association. Ian Snaith studied at Keele and Manchester Universities and later became a Senior Lecturer at the University of Leicester in its Law School. He is a consultant solicitor with Anthony Collins LLP of Birmingham and Manchester. He is the editor of the leading textbook on co-operative and community benefit society law.

ix

Contents Forewordv Prefacevii Author biographies ix Law report abbreviations xvii Table of Cases xxi Table of Statutes xlvii Table of Statutory Instruments lxvii Table of EU Materials and Other Guidance lxxvii Definition of a club lxxix

Part 1:  The Formation and Dissolution of a Club Chapter 1  Formation of the Club 1. The legal definition of a club 2. Historical introduction 3. Classification of clubs 4. Unincorporated members’ clubs 5. Working men’s clubs 6. Community clubs 7. Company clubs 8. Charitable clubs 9. Community amateur sports clubs 10. Choosing the essential structure 11. Specialist clubs 12. Umbrella organisations 13. Proprietary clubs Table 1  Legal structures: a summary

3 5 6 8 11 12 15 20 23 27 28 29 30 32

Chapter 2  The Club’s Constitution or Rules 1. The primacy of club rules 2. The rule-makers 3. Binding nature of the rules 4. Contents of the rules 5. Interpretation of the rules 6. Amendment of the rules 7. Statutory involvement: members’ clubs 8. Proprietary clubs

35 36 36 37 41 43 48 52

Chapter 3  Dissolution of the Club 1. Introduction 2. Amalgamation of clubs 3. Dissolution of the club 4. Members’ liability on dissolution 5. Impact of insolvency legislation

55 56 58 65 67

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Contents

Part 2:  Internal Relationships: The Club and its Members Chapter 4  Admission into the Club 1. Formal process 2. Selection process 3. Categories of membership 4. Restrictions on right to reject applications for membership 5. Privileges of membership 6. Entrance fee and subscriptions 7. Guests and visitors

75 75 76 80 84 85 88

Chapter 5  Management of the Club’s Affairs 1. Introduction 2. Officers of a members’ club 3. Election and tenure of officers 4. Auditor 5. Trustees 6. Branches and sub-clubs 7. Control by the managing committee in an unincorporated club and in a community club 8. Control by directors in an incorporated club 9. Control by trustees in a charitable club 10. Control by proprietor in a proprietary club 11. Cash basis of a members’ club 12. Power to borrow moneys 13. The committee’s duty of care to the club and its members 14. Members’ personal injury claims against the club 15. Children involved in club activities 16. Discrimination in managing the club’s affairs 17. Data protection: privacy and confidentiality 18. Membership list 19. Dealing with internal disputes

95 100 104 104 104 106 108 111 113 114 118 123 125

Chapter 6  Meetings of Club Members 1. Introduction 2. Annual General Meeting 3. Special meetings 4. Informal meetings 5. Notice of general meetings 6. Electronic meetings 7. Controlling attendance at meetings 8. Agenda 9. Chairman of meetings 10. Amendments to motions 11. Members’ resolutions 12. Quorum 13. Voting 14. Minutes 15. Committee meetings 16. Statutory requirements for company clubs 17. Proprietary clubs

127 127 129 130 130 134 135 136 137 139 140 141 143 147 150 151 152

Chapter 7  Cessation and Curtailment of Club Membership 1. Introduction 2. Resignation

153 153

xii

89 89 92 94 94 95

Contents 3. Lapsed membership 4. Expulsion: members’ clubs 5. Expulsion: proprietary clubs 6. Suspension 7. Disciplinary proceedings 8. Appeals 9. Breach of bye-laws 10. Reprimand and warning 11. Discrimination affecting membership Chapter 8  Ownership of the Club’s Property 1. Introduction 2. Unincorporated members’ clubs 3. Incorporated members’ clubs 4. Literary and scientific institutions 5. Proprietary clubs 6. Trusteeship

156 157 165 165 167 167 168 168 169 171 171 178 180 181 181

Chapter 9  Supply and Sale of Alcohol by the Club 1. Introduction185 2. Licensable activities 187 3. Qualifying club activities 187 4. Authorisations 188 5. Club premises certificate 188 6. Premises licence 201 7. Temporary event notice 206 8. Personal licence 211 9. Proprietary clubs 213 10. Appeals 213 11. Fees 214 12. Offences 215 Chapter 10  Supply and Sale of Food by the Club 1. Introduction 2. Food safety and hygiene 3. Registration of the club 4. Risk assessment 5. Staff training 6. Local surveillance 7. The supply of proper food 8. Offences

217 217 220 220 222 222 223 224

Chapter 11  Entertainment Provided by the Club 1. Introduction 2. Copyright 3. Publishing books 4. Regulated entertainment 5. Procedures relating to authorisations etc 6. Television licence 7. Noise nuisance

225 225 229 229 233 235 236

Chapter 12  Gaming and Lotteries Run by the Club 1. Introduction 2. Gaming: an overview 3. Exempt equal-chance gaming

237 238 239

xiii

Contents 4. Non-commercial equal-chance gaming 5. Gaming machines 6. Club machine permit 7. Club gaming permit 8. Procedure for obtaining club permits 9. Gaming: a miscellany 10. Lotteries: an overview 11. Incidental lottery 12. Private society lottery 13. Small society lottery 14. Lotteries: a miscellany 15. Betting 16. Cross-category activities 17. Proprietary clubs

241 244 245 246 247 249 250 251 252 253 256 257 258 258

Part 3:  External Relationships: The Club and Third Parties Chapter 13  The Club’s Civil Liability to Third Parties

261

Part A: Contract 1. Introduction 2. Unincorporated clubs: general principles of liability 3. Principal parties 4. The law of agency 5. Member’s liability 6. Corporate clubs: general principles of liability 7. The role of directors 8. Third party protection 9. Proprietary clubs

261 261 262 264 267 270 271 272 273

Part B: Tort274 10. Introduction 11. Unincorporated clubs: general principles of liability 12. Vicarious liability 13. Negligence and nuisance 14. Defamation 15. Incorporated clubs: general principles of liability 16. The director’s liability 17. Proprietary clubs Chapter 14  Third Party Challenges to the Club’s Decisions 1. Introduction 2. Decisions made under an express contract 3. Implied submission to the club’s jurisdiction 4. Judicial review 5. Remedies available 6. Discrimination claims affecting third party livelihood

274 274 274 277 286 289 290 291 293 295 296 298 301 301

Chapter 15  Landlord and Tenant Relationships Involving the Club 1. Introduction 303 2. Tenancies 304 3. Covenants in tenancies 305 4. Business tenancies 308 xiv

Contents 5. Residential tenancies 6. Discrimination in landlord and tenant matters 7. Licences 8. Proprietary clubs

313 321 323 325

Chapter 16  The Club’s Employment of Third Parties 1. Introduction 2. Contract of employment 3. Pay 4. Maternity and other leave 5. Right not to suffer detriment 6. Health and safety at work 7. Termination of the contract of employment 8. Discrimination in employment 9. References 10. Workers

327 328 332 334 336 337 340 347 352 353

Chapter 17  The Club’s Liability for Tax and Business Rates 1. Introduction 2. Mutual trading 3. Club accounts 4. Corporation tax 5. A miscellany of clubs 6. Other tax items 7. Value Added Tax 8. Stamp duty land tax 9. Business rates

355 356 356 359 363 365 366 377 378

Chapter 18  The Club’s Responsibility for Crime 1. Introduction 2. Unincorporated bodies 3. Corporate bodies 4. Vicarious liability 5. Statutes where criminal liability may fall on the club 6. Alternative civil sanctions 7. Serious offences

385 385 389 389 392 398 399

Part 4:  Clubs as Parties in Civil Proceedings Chapter 19  The Club’s Involvement in Civil Proceedings 1. Introduction 2. Pursuing claims 3. Club’s procedure on a claim 4. Defending claims 5. Club’s procedure on a defence 6. Limitation 7. Alternative dispute resolution

403 404 406 409 410 414 416

Appendices A Literary and Scientific Institutions Act 1854, sections 18 to 33 B Shop Clubs Act 1902, Schedule C Licensing Act 1964, Schedule 7 D Friendly Societies Act 1974, Schedule 2 E Co-operative and Community Benefit Societies 2014, section 14

423 427 429 433 435

xv

Contents F G H I J K L M N

Corporate Insolvency and Governance Act 2020, Schedule 14 437 Model Articles 2008 for private companies limited by shares441 Model Articles 2008 for private companies limited by guarantee 461 Model Articles for a community interest company limited by guarantee475 Constitution of a charitable incorporated organisation, ‘Association’ model497 Model full set of rules for an unincorporated members’ club (Basset Sports Club) 521 Model short-form set of rules for an unincorporated members’ club (Bassetshire Hockey Umpires Association) 539 Specimen notice and agenda for an AGM (Basset Historical Society) 545 Specimen minutes of a committee meeting (Basset Borough Council Standards Committee) 549

Index551

xvi

Law report abbreviations A & E: AC:

Adolphus & Ellis’ Reports (1834–1840) Law Reports, Appeal Cases in the House of Lords and (from 2009) the Supreme Court (1865 to date) ACSR: Australian Corporations and Securities Reports (Australia) (1989 to date) ACD: Administrative Court Digest (2001 to date) Admin LR: Administrative Law Reports (1989 to date) All ER: All England Reports (1936 to date). All England Reports also compiles collections of earlier law reports. All ER (Comm): All England Law Reports (Commercial Cases) (1998 to date) App Cas: Law Reports, Appeal Cases in the House of Lords (1875–1890) Atk: Atkyn’s Chancery Reports (1736–1755) B & Ald: Barnewall & Adolphus’ Kings Bench Reports (1817–1822) B & C: Barnewall & Cresswell’s King’s Bench Reports (1822–1830) B & S: Best and Smith’s Queen’s Bench Reports (1861–1865) BCC: British Company Law Cases (1983 to date) BCLC: Butterworth Company Law Cases (1983 to date) BLGR: Butterworths Local Government Reports (1999 to date) Bos & P: Bosanquet & Puller’s Common Pleas Reports (1796–1804) BTC: British Tax Cases (1982 to date) Bus LR: Business Law Review (1980 to date) BVC: British Value Added Tax Reporter (1973 to date) Camp: Campbell’s Nisi Prius Reports (1808–1816) Car & P: Carrington & Payne’s Nisi Prius Reports (1823–1841) CB: Common Bench Reports by Manning, Granger & Scott (1845– 1856) CB(NS): Common Bench Reports by Manning, Granger & Scott (New Series) (1856–1865) Ch: Law Reports, Chancery Division (1891 to date) Ch App: Law Reports, Chancery Appeal cases (1865–1875) Ch D: Law Reports, Chancery Division (1876–1890) CILL: Construction Industry Law Letter (1983 to date) CL: Common Law Reports (1853–55) CLC: Commercial Law Cases (1994 to date) CLR: Commonwealth Law Reports (1903 to date) (Australia) CLY: Current Law Yearbook (1947 to date) CMLR: Common Market Law Reports (1962 to date) COD: Crown Office Digest (1988–2000) Con LR: Construction Law Reports (1985 to date) Const LJ: Construction Law Journal (1984 to date)

xvii

Law report abbreviations Co Rep: Costs LR: CP Rep: Cr App R: CSOH: Crim LR: De GM & G: ECC: ECR: EG: EGLR: EHRR: El & Bl: ELR: EMLR: Emp LR: Env LR: Eq LR: ER: EWCA Civ: EWHC: F & F: Fam Law: FLR: FSR: FTLR: Guardian: HL Cas: HLR: HRLR: ICR: IR: IRLR: JP: KB L & TR: LGR: LG Rev: LJ Ch: LJMC: LJ QB:

Coke’s King’s Bench Reports (1572–1616) Costs Law Reports (1997 to date) Civil Procedure Reports (2000 to date) Criminal Appeal Reports (1908 to date) Scotland Court of Session (Outer House) (2005 to date) (neutral citation) Criminal Law Reports (1954 to date) De Gex Macnaghten & Gordon’s Bankruptcy Reports (1851– 1857) European Commercial Cases (1978 to date) European Court Reports (1954 to date) Estates Gazette (1858 to date) Estates Gazette Law Reports (1985 to date) European Human Rights Reports (1979 to date) Ellis & Blackburn’s Queen’s Bench Reports (1852–1858) Education Law Reports (1994 to date) Entertainment and Media Law Reports (1993 to date) Employment Law Reports (2000 to date) Environmental Law Reports (1992 to date) Equality Law Reports (2010 to date) English Reports (a compilation of earlier law reports from 1210– 1865) England & Wales Court of Appeal Civil Division (2001 to date) (neutral citation) England & Wales High Court (2001 to date) (neutral citation) Foster & Finlayson’s Nisi Prius Reports (1858–1867) Family Law (1971 to date) Family Law Reports (1980 to date) Fleet Street Reports of Patent Cases (1963 to date) Financial Times Law Reports (1981 to date) The Guardian newspaper Clark’s House of Lords Cases (1847–1866) Housing Law Reports (1967 to date) Human Rights Law Reports – UK Cases (1999 to date) Law Reports, Industrial Cases Reports (1975 to date) Irish Reports (1894 to date) (Ireland) Industrial Relations Law Reports (1972 to date) Justice of the Peace (Weekly Notes of Cases) (1887 to date) Law Reports, King’s Bench Division (1901–1952) Landlord and Tenant Reports (1998 to date) Knight’s Local Government Reports (1903 to date) Local Government Review (1971 to date) Law Journal Reports, Chancery, New Series (1831–1946) Law Journal Reports, Magistrates’ Cases New Series (1831–1896) Law Journal Reports, Queen’s Bench, New Series (1837–1946) xviii

Law report abbreviations Ll L Rep: Lloyd’s Rep: Lloyd’s Report, Bank: LLR: LR: LRLR: LSG: LT: LT Jo: M & G: M & W: Med LR: My & K: NPC: NI: NLJ: NSWLR: NZLR: P & CR: PCC: PIQR: Price: QB: QBD: R: R & IT: RA: RPC: RRC: RTR: RVR: SC: Sim (NS): SJ: SLT: Sol Jo: Stark: STC: Times: TC: TLR: UKHL: UKHRR:

Lloyd’s List Law Reports (1919–1967) Lloyd’s List Law Reports (1951 to date) Lloyd’s Law Reports Banking (1999 to date) Licensing Law Reports (2001 to date) Law Reports (1st Series) (1865–1875) Lloyd’s Reinsurance Law Reports (1995–1997) Law Society’s Gazette (1903–1993) Law Times Reports (1859–1947) Law Times Reports Newspaper (1843–1965) Manning & Granger’s Common Pleas Reports (1840–1844) Meeson & Welsby’s Exchequer Reports (1836–1847) Medical Law Reports (1989–1997) Mylne & Keen’s Chancery Reports (1832–1835) New Property Cases (1986 to date) Northern Ireland Law Reports (1925 to date) New Law Journal (1965 to date) New South Wales Law Reports (1971 to date) (Australia) New Zealand Law Reports (1883 to date) (New Zealand) Planning and Compensation Reports (1949 to date) Palmer’s Company Cases (1985–1989) Personal Injury and Quantum Reports (1992 to date) Price’s Exchequer Reports (1814–1824) Law Reports, Queen’s Bench Division (1890–1901 and 1952 to date) Law Reports, Queen’s Bench Division (1875–1890) Rettie’s Session Cases, 4th series (1878–1898) (Scotland) Rating and Income Tax Reports (1924–1960) Rating Appeals (1962 to date) Reports of Patent, Design and Trade Mark Cases (1884 to date) Ryde’s Rating Cases (1956 to date) Road Traffic Reports (1970 to date) Rating & Valuation Reporter (1965 to date) Session Cases (Scotland) (1822 to date) Simon’s Vice-Chancellor’s Reports, New Series (1850–1852) Solicitors’ Journal (1857 to date) Scots Law Times (1893 to date) (Scotland) Solicitors’ Journal (1857 to date) Starkie’s Nisi Prius Reports (1814–1822) Simon’s Tax Cases (1973 to date) The Times newspaper (1785 to date) Reports of Tax Cases (1875 to date) Times Law Reports (1884–1952) United Kingdom House of Lords (2001–2009) (neutral citation) United Kingdom Human Rights Reports (2000 to date) xix

Law report abbreviations UKSC: UKUT: VATTR: VTD: WLR: WN: WR: WTLR:

United Kingdom Supreme Court (2009 to date) (neutral citation) United Kingdom Upper Tribunal (neutral citation) Value Added Tax Tribunal Reports Value Added Tax Tribunal Decisions Weekly Law Reports (1953 to date) Weekly Notes (1862–1952) Weekly Reporter (1853–1906) Wills and Trusts Law Reports (2000 to date)

xx

Table of Cases

[All references are to paragraph numbers.] A Abbatt v Treasury Solicitor [1969] 1 WLR 561, [1969] 1 All ER 52; [1969] 1 WLR 1575, [1969] 3 All ER 1175, CA...................................... 2.23, 3.2, 4.32, 6.13, 6.44, 8.3 Abbott v Sullivan [1952] 1 KB 189, [1952] 1 All ER 226, [1951] 2 Lloyd’s Rep 573, [1952] 1 TLR 133, CA............................................................. 5.27, 7.30 Ad-Lib Club Ltd v Granville [1971] 2 All ER 300, [1971] FSR 1, [1972] RPC 673....................................................................................................... 1.68 Adams v Naylor [1946] AC 543, [1946] 2 All ER 241.................................... 19.9 Adams v Ursell [1913] 1 Ch 269.................................................................. 13.42 Addington Community Association v Croydon Corp and Gudgion (Valuation Officer) (1967) 13 RRC 126.................................................................. 17.48 Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513, [1957] 3 WLR 980, [1957] 3 All ER 563, CA............................. 1.18, 3.44, 5.57, 8.14, 15.13 Affleck v Newcastle Mind [1999] ICR 852, [1999] IRLR 405.................. 16.4, 16.10 Agar v Hyde (2000) 201 CLR 552................................................................ 13.53 Alabaster v Woolwich plc [2000] ICR 1037, [2000] IRLR 754....................... 16.73 Alassini v Telecom Italia SpA (Cases C-317/08 and C-320/08) [2010] ECR I-2213................................................................................................... 19.43 Alker v Collingwood Housing Association [2007] EWCA Civ 343, [2007] 1 WLR 2230, [2007] HLR 29, [2007] L & TR 23, [2007] 2 EGLR 43, [2007] 25 EG 184............................................................................................ 15.30 Alsop Wilkinson (a firm) v Neary [1996] 1 WLR 1220, [1995] 1 All ER 431....................................................................................................... 19.17 Amalgamated Society of Railway Servants v Osborne (No 2) [1911] 1 Ch 540, CA................................................................................................ 5.27 AMF International Ltd v Magnet Bowling Ltd [1968] 1 WLR 1028, [1968] 2 All ER 789, 66 LGR 706......................................................................... 13.50 Anderton v Rogers [1981] Crim LR 404........................................................ 18.13 Andreou v Institute of Chartered Accountants in England and Wales [1998] 1 All ER 14............................................................................................ 14.9 Andrews v Mitchell [1905] AC 78................................................................ 7.17 Andrews v Salmon (1888) WN 102.............................................................. 19.27 Antoniades v Villiers [1990] 1 AC 417, [1978] 2 All ER 942, (1978) 8 Fam Law 108................................................................................................ 15.48 Armagas Ltd v Mundogas SA [1986] AC 717, [1986] 2 WLR 1063, [1986] 2 All ER 385, [1986] 2 Lloyd’s Rep 109, (1986) 2 BCC 99197, (1986) 83 LSG 2002.............................................................................................. 13.10 Arnold v Britton [2015] UKSC 36, [2015] AC 1619, [2015] 2 WLR 1593, [2016] 1 All ER 1, [2015] HLR 31, [2015] 2 P & CR 14, [2015] L & TR 25......................................................................................................... 2.20 Arsenal Football Club Ltd v Smith (Valuation Officer) [1979] AC 1, [1977] 2 WLR 974, [1977] 2 All ER 267, 75 LGR 483........................................... 17.49 xxi

Table of Cases Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223, [1947] 2 All ER 680, (1947) 63 TLR 623, (1948) 112 JP 55, 45 LGR 635, (1947) 177 LT 641................................................................ 7.19, 14.11 Attorney General v Able [1984] QB 795, [1983] 3 WLR 845, [1984] 1 All ER 277, (1984) 78 Cr App R 197, [1984] Crim LR 35................................. 18.2 Attorney General v Davy (1741) 26 ER 531, (1741) 2 Atk 212..................... 6.44 Attorney General’s Reference (No 1 of 1995) [1996] 1 WLR 970, [1996] 4 All ER 21, [1996] 2 Cr App R 320, [1996] Crim LR 575.......................... 18.19 Auguste Noel Ltd v Curtis [1990] ICR 604, [1990] IRLR 326......................... 16.49 Automobile Proprietary Ltd v Brown [1955] 1 WLR 573, [1955] 2 All ER 214, (1955) 119 JP 328, 53 LGR 589, 48 R & IT 334, CA.............................. 1.28 Avondale Lawn Tennis Club v Murton (Valuation Officer) (1976) 241 EG 33......................................................................................................... 17.48 B Badger, Re [1905] 1 Ch 568........................................................................ 5.54 Baird v Wells (1890) 44 Ch D 661...................... 1.10, 1.69, 7.26, 8.2, 8.24, 15.50 Baker v British Boxing Board of Control [2015] EWHC 2469 (Ch)................ 7.26 Baker v Jones [1954] 1 WLR 1005, [1954] 2 All ER 553.................. 1.9, 2.15, 2.21, 5.102, 13.30 Baker v West Reading Social Club [2014] EWHC 3033 (Ch), [2014] BCC 575....................................................................................................... 3.46 Balfour v Barty-King [1957] 1 QB 496, [1957] 2 WLR 84, [1957] 1 All ER 156, [1956] 2 Lloyd’s Rep 646.............................................................. 13.35 Ball v Pearsall (1987) 10 NSWLR 700..................................................... 6.32, 6.34 Bank Melli Iran v Barclays Bank DCO (1951) 2 TLR 1057.............................. 13.14 Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2001] Ch 437, [2000] 3 WLR 1423, [2000] 4 All ER 221, [2000] Lloyd’s Rep Bank 292, [2000] BCC 968, [2000] WTLR 1049, (2000) 97(26) LSG 36, (2000) 150 NLJ 950, CA................................................................. 7.37 Barclays Bank of Swaziland Ltd v Hahn [1989] 1 WLR 506, [1989] 2 All ER 398, [1991] RVR 58, HL........................................................................ 6.14 Barings plc, Re [1999] 1 BCLC 433.............................................................. 5.36 Bartholomew v Hackney London Borough Council [1999] IRLR 246............ 16.78 Bartlett v English Cricket Board Association of Cricket Officials [2015] 8 WLUK 301.................................................................................. 13.53, 13.54 Barton v Taylor (1886) 11 App Cas 197....................................................... 6.24 Basildon Rugby Union Football Club v C & E Comrs [1988] VTD 3239........ 17.25 Baxendale v North Lambeth Liberal and Radical Club [1902] 2 Ch 427....... 13.45 Beddoe, Re [1893] 1 Ch 547............................................................... 8.30, 19.17 Bell v Lever Brothers Ltd [1932] AC 161....................................................... 16.48 Bellamy v Wells (1890) 60 LJ Ch 156........................................................... 13.42 Benveniste v University of Southampton [1989] ICR 617, [1989] IRLR 122... 16.74 Berent v Family Mosaic Housing [2012] EWCA Civ 961, [2012] CILL 3213... 13.46 Betty’s Cafés Ltd v Phillips Furnishing Stores Ltd [1959] AC 20, [1958] 2 WLR 513, [1958] 1 All ER 607............................................................... 15.19 Bilta (UK) Ltd (in liquidation) v Nazir (No 2) [2015] UKSC 23, [2016] AC 1, [2015] 2 WLR 1168, [2015] 2 All ER 1083, [2015] 2 All ER (Comm) 281, [2015] 2 Lloyd’s Rep 61, [2015] BCC 343, [2015] 1 BCLC 443, [2015] BVC 20................................................................................................. 13.26 Birne v National Sporting League (1957) Times, 12 April................ 13.61, 13.65 xxii

Table of Cases Blackburn and District Benefit Building Society v Cunliffe Brooks & Co (1882) 22 Ch D 61............................................................................... 5.51 Blackpool and Fylde Aero Club v Blackpool Borough Council [1990] 1 WLR 1195, [1990] 3 All ER 25, 88 LGR 864, (1991) 3 Admin LR 322, (1991) 155 LG Rev 246, CA.............................................................................. 14.7 Blake v Galloway [2004] EWCA Civ 814, [2004] 1 WLR 2844, [2004] 3 All ER 315, (2004) 101(29) LSG 30................................................................. 13.41 Blaydon Rugby Football Club (No 13801) [1996] BVC 4253........................ 17.36 Bliss v South East Thames Regional Health Authority [1987] ICR 700, [1985] IRLR 308............................................................................................... 16.43 Blue Albion Cattle Society, Re (1966) Guardian, 28 May.............................. 8.12 Bolton v Stone [1950] 1 KB 201, [1949] 2 All ER 851, 65 TLR 683, CA; [1951] AC 850, [1951] 1 All ER 1078, [1951] 1 TLR 97, 50 LGR 32, HL............................................................................................... 13.44, 13.49 Bony v Kacou [2017] EWHC 2146 (Ch)........................................................ 4.33 Booth v Parole Board see Reilly’s Application for Judicial Review, Re Bowyer v Percy Supper Club Ltd [1893] 2 QB 154, DC................................ 1.69 Boyle v Collins [2004] EWHC 271 (Ch), [2004] 2 BCLC 471.......... 3.2, 3.17, 3.20, 4.9, 8.16 Bracey v Read [1963] Ch 88, [1962] 3 WLR 1194, [1962] 3 All ER 472........ 15.14 Bradley v Jockey Club [2004] EWHC 2164 (QB), [2007] LLR 543; [2005] EWCA Civ 1056, [2006] LLR 1......................................................... 7.36, 14.2 Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378, CA............. 13.4, 13.5, 13.19 Braithwaite v South Durham Steel Co [1958] 1 WLR 986, [1958] 3 All ER 161....................................................................................................... 13.51 Breen v Amalgamated Engineering Union [1971] 2 QB 175, [1971] 2 WLR 742, [1971] 1 All ER 1148..................................................................... 14.10 Brighton Cycling and Angling Club Trusts, Re (1953), Times, 19 April, CA..................................................................................................... 3.2, 8.3 Bristol Athenaeum, Re (1889) 43 Ch D 236........................................... 3.44, 8.23 British Chiropractic Association v Singh [2010] EWCA Civ 350, [2011] 1 WLR 133, [2011] EMLR 1, (2010) 107(15) LSG 17, (2010) 160 NLJ 547....................................................................................................... 13.71 British Diabetic Association v Diabetic Society [1995] 4 All ER 812, [1996] FSR 1.................................................................................................... 1.2 British Judo Association v Petty [1981] ICR 660, [1981] IRLR 484................. 14.15 British Railways Board v Herrington [1972] AC 877, [1972] 2 WLR 537, [1972] 1 All ER 749............................................................................... 13.52 British Road Services Ltd v Slater [1964] 1 WLR 498, [1964] 1 All ER 816..... 13.42 British Union for the Abolition of Vivisection, Re [1995] 2 BCLC 1................ 6.8 Brown v Andrew (1849) 18 LJ QB 153................................................... 5.25, 6.55 Brown v Bullock [1961] 1 WLR 1095, CA..................................................... 17.21 Brown v Dale (1878) 9 Ch D 78.................................................................. 8.3 Brown v Lewis (1892) 12 TLR 455............................................................... 13.36 Bucks Constabulary Widows’ and Orphans’ Fund Friendly Society (No 2), Re [1979] 1 WLR 936, [1979] 1 All ER 623........................................... 8.3, 8.26 Burke v Amalgamated Society of Dyers [1906] 2 KB 583.............................. 2.30 Burland v Earle [1902] AC 83, PC................................................................. 13.28 Bushell v Secretary of State for the Environment [1981] AC 75, [1980] 3 WLR 22, [1980] 2 All ER 608, 78 LGR 269, (1980) 40 P & CR 51.......... 7.17 Butt v Kelsen [1952] Ch 197, [1952] 1 All ER 167, [1952] 1 TLR 214, CA..... 8.19 Buxton v Chief Constable of Northumbria (1983) 148 JP 9.......................... 18.14 xxiii

Table of Cases Byng v London Life Association Ltd [1990] Ch 170, [1989] 2 WLR 738, [1989] 1 All ER 560, (1989) 5 BCC 227, [1989] BCLC 400, [1989] PCC 190, (1989) 86(16) LSG 35, (1989) 139 NLJ 75, CA....................... 6.27, 6.28 Byrne v Kinematograph Society Renters Ltd [1958] 1 WLR 762, [1958] 2 All ER 579.................................................................................................. 7.5

C C & E Comrs v Automobile Association [1974] 1 WLR 1447, [1974] 1 All ER 1257, [1974] STC 192.......................................................................... 17.33 C & E Comrs v Barclays Bank plc [2006] UKHL 28, [2007] 1 AC 181, [2006] 3 WLR 1, [2006] 4 All ER 256, [2006] 2 All ER (Comm) 831, [2006] 2 Lloyd’s Rep 327, [2006] 1 CLC 1096, (2006) 103(27) LSG 33, (2006) 156 NLJ 1060....................................................................................... 13.30 C & E Comrs v Professional Footballers’ Association (Enterprises) Ltd [1993] 1 WLR 153, [1993] STC 86, HL............................................................. 17.24 Calvin v Carr [1980] AC 574, [1979] 2 WLR 755, [1979] 2 All ER 440, PC.... 7.23 Campbell v Campbell [2016] EWHC 765 (Ch)............................................. 1.68 Campbell v MGN Ltd [2002] EWCA Civ 1373; [2003] QB 658; [2003] 2 WLR 80; [2003] EMLR 39, CA............................................................... 5.82 Campbell v Thompson [1953] 1 QB 445, [1953] 2 WLR 656, [1953] 1 All ER 831.................................................................................... 13.33, 16.4, 19.25 Caparo Industries plc v Dickman [1990] 2 AC 605, [1990] 2 WLR 358, [1990] 1 All ER 568, [1990] BCC 164, [1990] BCLC 273, [1990] ECC 313, (1990) 87(12) LSG 42, (1990) 140 NLJ 248.................................. 13.30 Capper Pass Ltd v Lawton [1977] QB 852, [1977] 2 WLR 26, [1977] 2 All ER 11, [1977] ICR 83, [1976] IRLR 366...................................................... 16.73 Carlisle & Silloth Golf Club v Smith [1913] 3 KB 75, CA................ 1.1, 17.4, 17.16 Carlton Lodge Club v C & E Comrs [1975] 1 WLR 66, [1974] 3 All ER 798, [1974] STC 507.......................................................................... 17.24, 17.37 Carmichael v National Power plc [1999] 1 WLR 2042, [1999] 4 All ER 897, [1999] ICR 1226, [2000] IRLR 43, (1999) 96(46) LSG 38, HL................ 16.2 Carnoustie Golf Course Committee v IRC 1929 SC 419, 1929 SLT 366........ 17.16 Case (Valuation Officer) v British Railways Board (1972) 223 EG 941, [1972] RA 97, 16 RRC 123............................................................................... 17.46 Cassel v Inglis [1916] 2 Ch 211.................................................................... 5.25 Castle v St Augustine’s Links Ltd (1922) 38 TLR 615.................................... 13.43 Cavalier v Pope [1906] AC 428.................................................................... 15.30 Cawley & Co, Re (1889) 42 Ch D 209, CA.................................................. 6.52 Challoner v Robinson [1908] 1 Ch 49, CA............................................. 1.28, 1.68 Chamberlain v Boyd (1883) 11 QBD 407.................................................... 7.27 Chambers v British Olympic Association [2008] EWHC 2028 (QB)............... 14.4 Chandler v Kerley [1978] 1 WLR 693, [1978] 2 All ER 942, (1978) 8 Fam Law 108, CA................................................................................................ 15.47 Chandra v Mayor [2016] EWHC 2636 (Ch), [2017] 1 WLR 729................... 19.10 Chapman v Ellesmere [1932] 2 KB 431........................................................ 14.2 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, [2009] 3 WLR 267, [2009] 4 All ER 677, [2010] 1 All ER (Comm) 365, [2009] Bus LR 1200, 125 Con LR 1, [2010] 1 P & CR 9, [2009] 3 EGLR 11................................................................................................ 2.20 Charter v Race Relations Board [1973] AC 868, [1973] 2 WLR 299, [1973] 1 All ER 512............................................................................................. 1.69 xxiv

Table of Cases Chatsworth Investments v Cussins (Contractors) [1969] 1 WLR 1, [1969] 1 All ER 143............................................................................................. 13.8 Chaudhry v Prabhakar [1989] 1 WLR 29, [1988] 3 All ER 718, (1988) 138 NLJ Rep 172, CA............................................................................. 5.57, 5.58 Citizens Theatre Ltd, Re 1946 SC 14, 1946 SLT 29....................................... 6.37 City of London Corp v Fell [1994] 1 AC 458, [1993] 3 WLR 1164, [1993] 4 All ER 968, 92 LGR 1, (1995) 69 P & CR 461, [1993] 49 EG 113, (1994) 91(4) LSG 44, (1993) 143 NLJ 1747..................................................... 15.4 Claremont Liberal Club Ltd, Re (1910, unreported)..................................... 2.12 Clark v BET plc [1997] IRLR 348................................................................... 16.43 Cleveland Literary and Philosophical Society’s Land, Re [1931] 2 Ch 247..... 5.54 Cockerell v Aucompte (1857) 140 ER 489, (1857) 2 CB(NS) 440........ 13.11, 13.12 Coles v Samuel Smith Old Brewery (Tadcaster) [2007] EWCA Civ 1461, [2008] 2 EGLR 159............................................................... 3.44, 5.19, 5.57 Colgan v Kennel Club (unreported, 26 October 2001)....................... 7.36, 15.13 Collen v Wright (1857) 119 ER 1259, (1857) 7 El & Bl 301; (1857) 120 ER 241, (1857) 8 El & Bl 647..................................................................... 13.15 Collins v Lane [2003] LLR 19........................................................................ 7.27 Condon v Basi [1985] 1 WLR 866, [1985] 2 All ER 453, (1985) 135 NLJ 485, CA........................................................................................................ 13.53 Conejera v Webb [2002] EWHC 1644 (Ch), [2002] All ER (D) 499............... 7.4 Conservative and Unionist Central Office v Burrell [1982] 1 WLR 522, [1982] 2 All ER 1, [1982] STC 317, 55 TC 671, [1981] TR 543, CA........ 1.1, 1.9, 13.2, 13.30, 17.12 Construction Confederation, Re [2009] EWHC 3551 (Ch)...................... 3.19, 3.47 Cook v Deeks [1916] 1 AC 554, PC.............................................................. 13.25 Co-operative Group (CWS) Ltd v Stansell Ltd [2006] EWCA Civ 538, [2006] 1 WLR 1704, [2006] 2 BCLC 599, CA............................ 1.17, 1.61, 3.11, 3.21 Coote v Granada Hospitality Ltd (Case C-185/97) [1998] ECR I-5199, [1998] 3 CMLR 958, [1998] All ER (EC) 865, [1999] CEC 515, [1999] ICR 100, [1998] IRLR 656.................................................................................... 16.78 Coote v Granada Hospitality Ltd (No 2) [1999] 3 CMLR 334, [1999] ICR 942, [1999] IRLR 452............................................................................ 16.78 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, [1984] 3 WLR 1174, [1984] 3 All ER 935, [1985] ICR 14, [1985] IRLR 28, (1985) 82 LSG 437.................................................................. 14.11 Coupe v Guyett [1973] 1 WLR 669, [1973] 2 All ER 1058, [1973] RTR 518, 71 LGR 355, [1973] Crim LR 386, DC................................................... 18.15 Coventry v Lawrence [2014] UKSC 13, [2014] AC 822, [2014] 2 WLR 433, [2014] 2 All ER 622, 152 Con LR 1, [2014] Env LR 25, [2014] HLR 21, [2014] 2 P & CR 2, [2014] 1 EGLR 147, [2014] LLR 423............. 11.24, 13.43 Cox v Sun Alliance Life Ltd [2001] EWCA Civ 649, [2001] IRLR 448, [2001] Emp LR 660.......................................................................................... 16.78 Crago v Julian [1992] 1 WLR 372, [1992] 1 All ER 744, [1992] 1 FLR 478, [1992] 2 FCR 387, (1992) 24 HLR 306, (1992) 63 P & CR 356, [1992] 1 EGLR 84, [1992] 17 EG 108, [1992] Fam Law 294, [1991] EG 124 (CS), (1992) 89(3) LSG 32, [1991] NPC 124, CA........................................... 15.4 Crancour Ltd v Da Silvaesa (1986) 18 HLR 265, (1986) 52 P & CR 204, [1986] 1 EGLR 80, (1986) 278 EG 618, CA........................................... 15.48 Cunnack v Edwards [1896] 2 Ch 679, CA.............................................. 8.3, 8.13 Currie v Barton [1988] 2 WLUK 112, CA................................................ 14.4, 14.5 Curzon Syndicate Ltd, Re (1920) 149 LT Jo 232................... 3.30, 3.60, 4.34, 7.30 Customs & Excise Officers’ Mutual Guarantee Fund, Re [1917] 2 Ch 18...... 3.17 xxv

Table of Cases D D&F Estates Ltd v Church Commissioners for England [1989] AC 177, [1988] 3 WLR 368, [1988] 2 All ER 992, 15 Con LR 35, [1988] 2 EGLR 213, (1988) 4 Const LJ 100, [1988] EG 113 (CS), (1988) 85(33) LSG 46, (1988) 138 NLJ Rep 210................................................................. 13.35 Davies v Barnes Webster & Sons Ltd [2011] EWHC 2560 (Ch)............... 1.12, 13.5 Davis v Carew-Pole [1956] 1 WLR 833, [1956] 2 All ER 524......................... 14.4 Dawkins v Antrobus [1881] 17 Ch D 615........................... 2.20, 2.22, 2.31, 5.27, 7.10, 7.12, 7.19 Dawson-Damer v Taylor Wessing LLP [2017] EWCA Civ 74, [2017] 1 WLR 3255, CA.............................................................................................. 5.84 De Bussche v Alt (1878) 8 Ch D 286, CA..................................................... 13.14 De Parrell v Walker (1932) 49 TLR 37........................................................... 16.77 De Vries v Corner (1865) 13 LT 636............................................................. 13.19 Dean and Chapter of Rochester v Pierce (1808) 170 ER 1023, (1808) 1 Camp 466............................................................................................ 15.7 Delauney v Strickland (1818) 171 ER 690, (1818) 2 Stark 416..................... 13.7 Delaware Mansions Ltd v Westminster City Council [2001] UKHL 55, [2002] 1 AC 321, [2001] 3 WLR 1007, [2001] 4 All ER 737, 79 Con LR 39, [2002] BLGR 1, [2001] 44 EG 150 (CS), (2001) 98(45) LSG 26, (2001) 151 NLJ 1611, [2001] NPC 151..................................................... 13.39, 13.42,13.46 Design Progression Ltd v Thurloe Properties Ltd [2004] EWHC 324 (Ch), [2005] 1 WLR 1, [2004] 2 P & CR 31, [2004] L & TR 25, [2004] 1 EGLR 121, [2004] 10 EG 184 (CS), (2004) 101(12) LSG 36........................... 15.9 Devonald v Rosser & Sons [1906] 2 KB 728................................................. 2.19 Deweer v Belgium [1980] ECC 169, (1979–80) 2 EHRR 439............. 5.101, 19.43 District Bank Ltd v Turner see Turner’s Will Trusts, Re Dockers’ Labour Club and Institute Ltd v Race Relations Board [1976] AC 285, [1974] 3 WLR 533, [1974] 3 All ER 592................................... 1.69, 4.22 Donoghue v Folkestone Properties Ltd [2003] EWCA Civ 231, [2003] QB 1008, [2003] 2 WLR 1138, [2003] 3 All ER 1101, (2003) 100(17) LSG 29........... 13.52 Donoghue v Stevenson [1932] AC 562, 1932 SC (HL) 31, 1932 SLT 317..... 5.66, 13.40 Downe Village Residents’ Association v Valentine (Valuation Officer) [1976] RA 117.................................................................................................. 17.48 Doyle v Falconer (1865–1867) LR 1 PC 328................................................. 6.24 Doyle v White City Stadium Ltd [1935] 1 KB 110, CA............................ 2.26, 2.30 DPP v Bradfute & Associates Ltd [1967] 2 QB 291, [1967] 2 WLR 459, [1967] 1 All ER 112, (1967) 131 JP 117................................................. 12.39 Draper v Earl Manvers (1892) 9 TLR 73........................................................ 13.13 Duck v Bates [1884] 13 QBD 843, CA.......................................................... 11.3 Duke of Westminster v Guild [1985] QB 688, [1984] 3 WLR 630, [1984] 3 All ER 144, (1984) 48 P & CR 42, (1983) 267 EG 762........................... 16.8 Dunton v Dover District Council (1977) 76 LGR 87..................................... 13.42 Durant v Financial Services Authority [2003] EWCA Civ 1746, [2004] FSR 28, CA................................................................................... 5.84, 5.88, 5.89 Durrant v Clariston Clothing Co [1974] IRLR 360......................................... 16.49 E Eagle v Redlime Ltd [2011] EWHC 838 (QB), 136 Con LR 137, [2011] 15 EG 92 (CS)................................................................................................. 19.42 xxvi

Table of Cases Earl of Mountcashell v Barber (1853) 139 ER 23, (1853) 14 CB 53...... 13.17, 13.19 Eastham v Newcastle United Football Club Ltd [1964] Ch 413, [1963] 3 WLR 574, [1963] 3 All ER 139............................................................... 14.10 Edmonds v Lawson [2000] QB 501, [2000] 2 WLR 1091, [2000] ICR 567, [2000] IRLR 391, (2000) 97(14) LSG 42................................................ 4.33 EDO MBM Technology Ltd v Campaign to Smash EDO [2005] EWHC 837 (QB)..................................................................................................... 19.22 Egan v Motor Services (Bath) Ltd [2007] EWCA Civ 1002, [2008] 1 WLR 1589, [2008] 1 All ER 1156, [2008] 1 FLR 1294, [2008] Fam Law 317, CA........ 19.2 Egger v Viscount Chelmsford [1965] 1 QB 248, [1964] 3 WLR 714, [1964] 3 All ER 406, CA.................................................................................... 13.65 Electrical, Electronic, Telecommunication and Plumbing Union v Times Newspapers Ltd [1980] QB 585, [1980] 3 WLR 98, [1980] 1 All ER 1097........................................................................................... 13.65, 13.71 Ellis v Sheffield Gas Consumer’s Co (1853) 118 ER 955, (1853) 2 El & Bl 767....................................................................................................... 13.32 Elwood (Inspector of Taxes) v Utitz [1966] NI 93, 42 TC 482....................... 17.21 Emms v R & C Comrs [2008] STC (SCD) 618, [2008] STI 374...................... 17.21 Empress Car Co (Abertillery) Ltd v National Rivers Authority [1999] 2 AC 22, [1998] 2 WLR 350, [1998] 1 All ER 481, [1998] Env LR 396, [1998] EG 16 (CS), (1998) 95(8) LSG 32, (1998) 148 NLJ 206, [1998] NPC 16.... 18.7, 18.8, 18.9 Enderby Town Football Club v Football Association [1971] Ch 591, [1970] 3 WLR 1021, [1971] 1 All ER 215, CA............................................ 7.17, 14.10 Ener-G Holdings plc v Hormell [2012] EWCA Civ 1059, [2013] 1 All ER (Comm) 1162, [2012] CP Rep 47, 144 Con LR 43, [2012] 3 EGLR 61, [2012] 45 EG 96................................................................................... 19.5 Ernest v Loma Gold Mines Ltd [1896] 2 Ch 572........................................... 6.42 Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd [1943] Ch 167, [1943] 1 All ER 413, CA.......................................... 11.3, 11.5 Esselte AB v Pearl Assurance plc [1997] 1 WLR 891, [1997] 2 All ER 41, (1998) 75 P & CR 30, [1997] 1 EGLR 73, [1997] 02 EG 124, [1996] EG 178 (CS), (1996) 93(44) LSG 2............................................................. 15.15 Essexcrest Ltd v Evenlex Ltd (1988) 55 P & CR 279, [1988] 01 EG 56.......... 15.24 Evans v Waitemata District Pony Club [1972] NZLR 773.............................. 13.41 Exeter City Athletic Football Club Ltd v Football Conference Ltd [2004] EWHC 831 (Ch), [2004] 1 WLR 2910, [2004] 4 All ER 1179, [2004] BCC 498, [2005] 1 BCLC 238, (2004) 101(9) LSG 31........................... 19.45 Express & Echo Publications Ltd v Tanton [1999] ICR 693, [1999] IRLR 367, (1999) 96(14) LSG 31........................................................................... 16.2 F Farnworth Finance Facilities Ltd v Attryde [1970] 1 WLR 1053, [1970] 2 All ER 774, [1970] RTR 352, CA................................................................. 2.29 FC Shepherd & Co Ltd v Jerrom [1987] QB 301, [1986] 3 WLR 801, [1986] 3 All ER 589, [1986] ICR 802, [1986] IRLR 358...................................... 16.42 Feeney v MacManus [1937] IR 23.................................................... 1.9, 3.17, 8.3 Ferguson v Welsh [1987] 1 WLR 1553, [1987] 3 All ER 777, [1988] IRLR 112, 86 LGR 153, (1987) 137 NLJ 1037........................................................ 13.50 Ferguson v Wilson (1866–67) LR 2 Ch App 77............................................. 13.26 Figgins v Baghino see Russell Institution, Re Finch v Oake [1896] 1 Ch 409..................................................................... 7.2 xxvii

Table of Cases Firmin & Sons Ltd v International Club (1889) 5 TLR 694............................ 19.19 Fisher v Keane (1878) 11 Ch D 353, CA................................................. 7.11, 7.20 Flaherty v National Greyhound Racing Club Ltd [2005] EWCA Civ 1117, [2005] LLR 571, (2005) 102(37) LSG 31......................................... 7.21, 7.24 Flemyng v Hector (1836)150 ER 716, (1836) 2 M & W 172.... 1.1, 2.1, 5.44, 5.57, 13.12, 13.16, 13.19 Fletcher v Income Tax Commissioner [1972] AC 414, [1972] 2 WLR 14, [1971] 3 All ER 1185, PC.............................................................. 17.3, 17.14 Foley v Post Office [2001] 1 All ER 550, [2000] ICR 1283, [2000] IRLR 827.. 16.51 Football Association Premier League Ltd v QC Leisure [2012] EWCA Civ 1708, [2013] Bus LR 866, [2013] FSR 20............................................... 11.6 Forest of Dean Coal Mining Co, Re (1878) 10 Ch D 450.............................. 5.32 Fountaine v Chesterton [1968] 112 SJ 690.................................................. 7.20 Fred Drughorn Ltd v Rederiaktiebolaget Transatalantic [1919] AC 203......... 13.18 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, [1964] 2 WLR 618, [1964] 1 All ER 630......................................... 13.10 Fryer v Harris (1955) Times, 30 July............................................................. 5.16 Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855, [2012] Ch 333, [2012] 2 WLR 1008, [2012] 1 All ER 414, [2012] 1 All ER (Comm) 1148, [2012] Bus LR 606, [2011] BCC 910, [2012] 1 BCLC 335, [2012] 1 CLC 850......................................................................... 19.45 G Gaiman v National Association for Mental Health [1971] Ch 317, [1970] 3 WLR 42, [1970] 2 All ER 362........................... 1.9, 1.60, 5.38, 7.5, 7.20, 14.5 Garratt v Mirror Group Newspapers Ltd [2011] EWCA Civ 425, [2011] ICR 880, [2011] IRLR 591............................................................................ 2.19 Garsington Opera Ltd v R & C Comrs [2009] UKFTT 77 (TC)....................... 17.35 General Cleaning Contractors v Christmas [1953] AC 180, [1953] 2 WLR 6, [1952] 2 All ER 1110, 51 LGR 109......................................................... 16.39 Gibson v Douglas [2016] EWCA Civ 1266, [2017] HLR 11, [2017] 1 P & CR DG21.................................................................................................... 13.51 Gifford v Governor of Bure Prison [2014] EWHC 911 (Admin)..................... 14.9 Gilbert (Valuation Officer) v S Hickinbottom & Sons Ltd [1956] 2 QB 40, [1956] 2 WLR 952, [1956] 2 All ER 101, (1956) 120 JP 288, 54 LGR 215, 1 RRC 46, (1956) 49 R & IT 231........................................................... 17.44 Gillingham Bus Disaster Fund, Re [1958] Ch 300, [1957] 3 WLR 1069, [1958] 1 All ER 37................................................................................. 8.3 GKN Bolts & Nuts Ltd (Automotive Division) Birmingham Works Sports and Social Club, Re [1982] 1 WLR 774, [1982] 2 All ER 855, (1982) 79 LSG 953............................................................................ 1.1, 2.20, 3.18, 4.7, 8.3 Glasgow Corp v Johnstone [1965] AC 609, [1965] 2 WLR 657, [1965] 1 All ER 730, 1965 SC (HL) 1, 1965 SLT 133, (1965) 129 JP 250, 63 LGR 171, [1965] RA 49, [1965] RVR 111, 11 RRC 127.......................................... 15.48 Glenester v Hunter (1831) 172 ER 878, (1831) 5 Car & P 62....................... 13.5 Globalink Telecommunications Ltd v Wilmbury Ltd [2002] EWHC 1988 (QB), [2002] BCC 958, [2003] 1 BCLC 145........................................... 2.37 Glynn v Keele University [1971] 1 WLR 487, [1971] 2 All ER 89................... 7.26 Godfrey v Demon Internet Ltd [2001] QB 201, [2000] 3 WLR 1020, [1999] 4 All ER 342, [1999] EMLR 542............................................................. 13.63 Goldman v Hargrave [1967] 1 AC 645, [1966] 3 WLR 513, [1966] 2 All ER 989, [1966] 2 Lloyd’s Rep 65................................................................ 13.42 xxviii

Table of Cases Goldsmiths’ Co v West Metropolitan Railway Co [1904] 1 KB 1................... 6.12 Goodwin v Baldwin [1974] 1 WLUK 243, (1974) Times, 2 February............. 18.14 Gould v McAuliffe [1941] 2 All ER 527......................................................... 13.51 Graff v Evans (1882) 8 QBD 373, DC........................................................... 9.3 Gramophone & Typewriter Ltd v Stanley [1908] 2 KB 89............................. 8.19 Gramophone Co Ltd v Stephen Cawardine & Co [1934] Ch 450................. 11.7 Gray v Marlborough School [2006] EWCA Civ 1262, [2006] ELR 516.......... 7.20 Gray v Pullen (1864) 122 ER 1091, (1864) 5 B & S 970............................... 13.35 Greater London Red Cross Blood Transfusion Services v C & E Comrs [1983] VATTR 241............................................................................................ 17.27 Green v Walkling [2007] EWHC 3251 (Ch), [2008] BCC 256, [2008] 2 BCLC 332....................................................................................................... 13.25 Greig v Insole [1978] 1 WLR 302, [1978] 3 All ER 449................................. 14.10 Grice v Stourport Tennis, Hockey and Squash Club [1997] CLY 3859........... 5.64 Grindley v Barker (1798) 126 ER 875, (1798) 1 Bos & P 229........................ 6.44 Groveside Properties Ltd v Westminster Medical School (1983) 9 HLR 118, (1984) 47 P & CR 507, (1983) 267 EG 593.......................................... 15.13

H H, Re [1996] AC 563, [1996] 2 WLR 8, [1996] 1 All ER 1, [1996] 1 FLR 80, [1996] 1 FCR 509, [1996] Fam Law 74, (1995) 145 NLJ 1887, HL........ 7.17 Habton Farms v Nimmo [2003] EWCA Civ 68, [2004] QB 1, [2003] 3 WLR 633, [2003] 1 All ER 1136, [2003] 2 All ER (Comm) 109, [2003] 2 CLC 353, CA................................................................................................ 13.15 Hale v Hants and Dorset Motor Services [1947] 2 All ER 628, (1948) 112 JP 47, 46 LGR 50....................................................................................... 13.46 Hall v Brooklands Auto Racing Club [1933] 1 KB 205, CA............................ 13.56 Hall (Inspector of Taxes) v Lorimer [1994] 1 WLR 209, [1994] 1 All ER 250, [1994] STC 23, [1994] ICR 218, [1994] IRLR 171, 66 TC 349, [1993] STI 1382, (1993) 90(45) LSG 45........................................................... 16.3 Hall v Owen-Jones (t/a Central Dairies) [1967] 1 WLR 1362, [1967] 3 All ER 209, (1967) 131 JP 405, 65 LGR 511.................................................... 10.26 Halle Concerts Society v R & C Comrs [2016] UKFTT 294 (TC), [2016] STI 1543..................................................................................................... 17.33 Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002, [2004] 4 All ER 920, [2004] CP Rep 34, [2004] 3 Costs LR 393, (2004) 101(22) LSG 31, (2004) 154 NLJ 769..................... 5.102, 19.43 Hampshire v Wickens (1878) 7 Ch D 555.................................................... 15.8 Hanchette-Stamford v Attorney General [2008] EWHC 330 (Ch), [2009] Ch 173, [2009] 2 WLR 405, [2008] 4 All ER 323, [2008] 2 P & CR 5, [2009] WTLR 101, (2008) 158 NLJ 371...................................................... 8.4, 8.27 Hanuman v Guyanese Association for Racial Unity and Democracy (13 June 1996, Reference LTA/96/5434/G)......................................................... 1.13 Harben v Phillips (1883) 23 Ch D 14........................................................... 6.42 Hardy v Hoade [2017] EWHC 2476 (Ch)........................................ 2.20, 8.3, 8.12 Hare v Gocher [1962] 2 QB 641, [1962] 3 WLR 339, [1962] 2 All ER 763, (1962) 126 JP 395, 60 LGR 278, (1962) 13 P & CR 298........................ 6.12 Harington v Sendall [1903] 1 Ch 921.......................................... 2.22, 2.32, 6.44 Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200, CA...................... 15.7 Harms (Inc) Ltd v Martans Club Ltd [1927] 1 Ch 526.................................. 11.5 Harper v Granville Smith (1891) 7 TLR 284.................................................. 13.13 xxix

Table of Cases Harrison v Abergavenny [1887] 3 TLR 324................................................... 19.9 Harrods Ltd v Harrodian School Ltd [1996] RPC 697, CA............................. 7.37 Hartley Baird Ltd, Re [1955] Ch 143, [1954] 3 WLR 964, [1954] 3 All ER 695....................................................................................................... 6.34 Haward v Fawcetts (a firm) [2006] UKHL 9, [2006] 1 WLR 682, [2006] 3 All ER 497, [2006] 10 EG 154 (CS)............................................................. 19.42 Hawke v Cole (1890) 62 LT 658................................................................... 13.12 Hawley v Steele (1877) 6 Ch D 521............................................................. 13.42 Headford v Bristol and District Health Authority [1995] PIQR P180, CA........ 19.42 Heaton Cricket Club v Westwood (Valuation Officer) (1959) 5 RRC 98......... 17.48 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, [1963] 3 WLR 101, [1963] 2 All ER 575, [1963] 1 Lloyd’s Rep 485........................ 5.57, 5.99 Heis v MF Global UK Services Ltd [2016] EWCA Civ 569.............................. 14.7 Henderson v Bank of Australasia (1890) 45 Ch D 330, CA............................ 6.29 Henderson v James Louttit & Co (1894) 21 R 674, Ct of Sess....................... 6.34 Henrietta Barnett School Governing Body v Hampstead Garden Suburb Institute (1995) 93 LGR 470, [1995] EG 55 (CS), [1995] NPC 49.......... 15.47 Hibernian Dance Club v Murray [1997] PIQR P46.............................. 13.49, 19.23 Hickman v Kent or Romney Marsh Sheepbreeders’ Association (1920) 36 TLR 528................................................................................................ 6.38 Higher Education Statistics Agency Ltd v C & E Comrs [2000] STC 332, [2000] BTC 5120, [2000] BVC 150, [2000] STI 543.............................. 17.25 Hilder v Associated Portland Cement Manufacturers Ltd [1961] 1 WLR 1434, [1961] 3 All ER 709............................................................................... 13.41 Hillil Property & Investment Co Ltd v Naraine Pharmacy Ltd (1980) 39 P & CR 67, (1979) 252 EG 1013.................................................................. 15.13 Hitching Town Football Club v Wallace (Valuation Officer) [1961] RVR 462....................................................................................................... 17.48 HL Bolton Engineering Co Ltd v TJ Graham & Sons Ltd [1957] 1 QB 159, [1956] 3 WLR 804, [1956] 3 All ER 624, CA.......................................... 18.12 HO Brandt Co v HN Morris & Co Ltd [1917] 2 KB 784, CA.......................... 13.18 Hodgkinson v Crowe (1874–75) LR 10 Ch App 622..................................... 15.11 Hodgson v Scarlett (1818) 106 ER 86, (1818) 1 B & Ald 232....................... 16.78 Hole v Garnsey [1930] AC 472........................................... 2.27, 2.28, 3.22, 5.27 Hollins v Russell [2003] EWCA Civ 718, [2003] 1 WLR 2487, [2003] 4 All ER 590, [2003] 3 Costs LR 423, (2003) 100(28) LSG 30, (2003) 153 NLJ 920....................................................................................................... 5.36 Hollister v National Farmers’ Union [1979] ICR 542, [1979] IRLR 238.......... 16.49 Holywell Union v Halkyn District Mines Drainage Co [1895] AC 117............ 17.45 Honeywill & Stein Ltd v Larkin Bros (London’s Commercial Photographers) Ltd [1934] 1 KB 191............................................................................. 13.35 Hopkinson v Marquis of Exeter (1867–68) LR 5 Eq 63.................................. 7.11 Horbury Bridge Coal Iron and Waggon Co, Re (1879) 11 Ch D 109............ 6.29 Horley Town Football Club, Re see Hunt v McLaren Hostgilt Ltd v Megahart Ltd [1999] STC 141, [1999] BTC 5057, [1999] BVC 78, (1999) 77 P & CR D34.................................................................... 17.25 Howells v Dominion Insurance Co Ltd [2005] EWHC 552 (QB)........... 19.9, 19.29, 19.30 HR Trustees Ltd v German see IMG Pension Plan, Re HSBC Bank plc (formerly Midland Bank Plc) v Madden [2001] 1 All ER 550, [2000] ICR 1283, [2000] IRLR 827........................................................ 16.51 Huckerby v Elliott [1970] 1 All ER 189, DC................................................... 18.19 Hunt v McLaren [2006] EWHC 2386 (Ch), [2006] WTLR 1817............... 2.20, 8.3 xxx

Table of Cases Hunter v Canary Wharf Ltd [1997] AC 655, [1997] 2 WLR 684, [1997] 2 All ER 426, [1997] CLC 1045, 54 Con LR 12, [1997] Env LR 488, [1997] 2 FLR 342, (1998) 30 HLR 409, [1997] Fam Law 601, [1997] EG 59 (CS), (1997) 94(19) LSG 25,(1997) 147 NLJ 634........................................... 13.39 Huntingdon Life Sciences Group plc v Stop Huntingdon Animal Cruelty [2005] EWHC 2233 (QB)............................................................ 19.22, 19.30 Hurst v Hone [2010] EWHC 1159 (QB), [2010] All ER (D) 256..................... 5.57 Hydrodam (Corby) Ltd, Re [1994] BCC 161, [1994] 2 BCLC 180................. 5.32 I IFX Investment Co Ltd v R & C Comrs [2016] EWCA Civ 436, [2016] 1 WLR 3952, [2017] 1 All ER 45, [2016] STC 1666, [2016] BVC 14, [2016] LLR 521....................................................................................................... 12.40 IMG Pension Plan, Re [2009] EWHC 2785 (Ch)............................................ 2.27 IRC v Eccentric Club Ltd [1924] 1 KB 390, CA........... 1.26, 1.28, 1.69, 17.3, 17.14 Indian Zoedone Co, Re (1884) 26 Ch D 70.................................................. 6.27 Interlego AG v Tyco Industries Inc [1989] AC 217, [1988] 3 WLR 678, [1988] 3 All ER 949, [1988] 2 FTLR 133, [1988] RPC 343................................. 11.2 International Gymnastics School v C & E Comrs (LON/91/186)................... 17.1 International Management Group (UK) Ltd v German see IMG Pension Plan, Re International Tin Council [1989] Ch 309, [1988] 3 WLR 1159, [1988] 3 All ER 257, (1988) 4 BCC 653, [1989] PCC 90, CA.................................... 3.19 Irish Shipping Ltd v Commercial Assurance plc [1991] 2 QB 206, [1990] 2 WLR 117, [1989] 3 All ER 853, [1989] 2 Lloyd’s Rep 144, (1990) 87(5) LSG 39, CA........................................................................................... 19.25 J J Franklin & Son Ltd, Re [1937] 4 All ER 43.................................................. 13.25 Jarrott v Ackerly (1915) 113 LT 371............................................................. 8.25 Javid v Aqil [1991] 1 WLR 1007, [1991] 1 All ER 243, (1991) 61 P & CR 164, [1990] 41 EG 61, [1990] EG 69 (CS), (1990) 140 NLJ 1232, CA............ 15.3 Jennings v Stephens [1936] Ch 469, [1936] 1 All ER 409, CA............... 11.5, 18.30 Jerome v Kelly (Inspector of Taxes) [2004] UKHL 25, [2004] 1 WLR 1409, [2004] 2 All ER 835, [2004] STC 887, 76 TC 147, [2004] BTC 176, [2004] WTLR 681, [2004] STI 1201, [2004] 21 EG 151 (CS), (2004) 101(23) LSG 33, [2004] NPC 75........................................................... 8.26 Jetivia SA v Bilta (UK) Ltd (in liquidation) [2015] UKSC 23, [2016] AC 1, [2015] 2 WLR 1168, [2015] 2 All ER 1083, [2015] 2 All ER (Comm) 281, [2015] 2 Lloyd’s Rep 61, [2015] BCC 343, [2015] 1 BCLC 443, [2015] BVC 20................................................................................................. 3.52 John v Matthews [1970] 2 QB 443, [1970] 2 WLR 1246, [1970] 2 All ER 643, 68 LGR 581, DC.................................................................................... 1.69 John v Rees [1970] Ch 345, [1969] 2 WLR 1294, [1969] 2 All ER 274..... 1.9, 1.10, 2.6, 6.10, 6.25, 6.27, 6.32, 6.35, 7.20, 7.31, 19.8, 19.22 John Henshall (Quarries) v Harvey [1965] 2 QB 233, [1965] 2 WLR 758, [1965] 1 All ER 725, (1965) 129 JP 224, DC................................ 18.12, 18.15 John Laing & Son v Kingswood Assessment Committee [1949] 1 KB 344, [1949] 1 All ER 224, 65 TLR 80, (1949) 113 JP 111, 47 LGR 64, 42 R & IT 15, CA.............................................................................................. 17.44 xxxi

Table of Cases Johnson v Medical Defence Union [2004] EWHC 2509 (Ch), [2005] 1 WLR 750, [2005] FSR 28, [2005] 1 All ER 87........................................... 5.89, 5.92 Jones v Hope (1880) 3 TLR 247 (note), CA........................................ 13.14, 13.15 Jones v Northampton Borough Council [1990] 5 WLUK 162, [1990] CLY 3274, [1990] TLR 387, CA.......................................................... 5.66, 13.30 Jones v South-West Lancashire Coal Owners Association Ltd [1927] AC 827, (1927) 28 Ll L Rep 259......................................................................... 17.14 K Keene v Wellcom London Ltd [2014] EWHC 134 (Ch), [2014] WTLR 1011... 3.18, 3.46, 8.3 Keeves v Dean [1924] 1 KB 685................................................................... 15.26 Kennaway v Thompson [1981] QB 88, [1980] 3 WLR 361, [1980] 3 All ER 329, CA........................................................................... 11.24, 13.43, 13.44 Kennemer Golf and Country Club v Staatssecetaris van Financiën (Case C-174/00) [2002] QB 1252, [2002] 3 WLR 829, [2002] STC 502, [2002] ECR I-3293, [2002] 2 CMLR 12, [2002] All ER (EC) 480, [2002] CEC 330, [2002] BTC 5205, [2002] BVC 395, [2002] STI 354............... 17.34 Keys v Boulter (No 2) [1972] 1 WLR 642, [1972] 2 All ER 303...................... 3.17 King v South Northamptonshire District Council (1992) 24 HLR 284, 90 LGR 121, (1992) 64 P & CR 35, [1992] 1 EGLR 53, [1992] 06 EG 152, (1992) 156 LG Rev 642, [1991] EG 114 (CS), CA.................................. 15.7 Kingston Cotton Mill Co (No 2), Re [1896] 2 Ch 279, CA............................ 5.37 Kirkwood v Johnson (1979) 38 P & CR 392, (1979) 250 EG 239.................. 15.20 Knowles v Zoological Society of London [1959] 1 WLR 823, [1959] 2 All ER 595, CA................................................................................................ 6.46 Kowloon Stock Exchange Ltd v IRC (Hong Kong) [1985] 1 WLR 133, [1985] 1 All ER 205, [1984] STC 602, [1985] PCC 155, [1985] FLR 114, (1984) 81 LSG 3502, PC.................................................................................. 1.1 Kulkarni v NHS Education Scotland [2013] Eq LR 34.................................... 14.15 L Labouchere v Earl of Wharncliffe (1879) 13 Ch D 346........ 6.10, 6.11, 6.13, 7.16 Lachaux v Independent Print Ltd [2019] UKSC 27, [2020] AC 612, [2019] 3 WLR 18, [2019] 4 All ER 485, [2019] EMLR 22...................................... 13.60 Ladbrook Park Golf Club v Stratford-upon-Avon Rural District Council (1957) 1 RRC 202, 50 R & IT 91........................................................... 17.54 Lambert v Addison (1882) 46 LT 20....................................................... 7.3, 7.19 Land Credit & Co of Ireland v Lord Fermoy (1870) LR 5 Ch App 763........... 5.36 Lau Liat Meng v Disciplinary Committee [1968] AC 391, [1967] 3 WLR 877....................................................................................................... 14.5 Lavarack v Woods of Colchester [1967] 1 QB 278, [1966] 3 WLR 706, [1966] 3 All ER 683.......................................................................................... 16.43 Law v National Greyhound Racing Club Ltd [1983] 1 WLR 1302, [1983] 3 All ER 300, (1983) 80 LSG 2367............................................................ 7.25 Lead Co’s Workmen’s Fund Society [1904] 2 Ch 196............................. 3.17, 3.20 Leahy v Attorney General for New South Wales [1959] AC 457, [1959] 2 WLR 722, [1959] 2 All ER 300, PC............................................ 1.9, 3.17, 8.27 Leary v National Union of Vehicle Builders [1971] Ch 34, [1970] 3 WLR 434, [1970] 2 All ER 713................................................................ 7.22, 7.23, 7.37 Lee v Bissett (1856) 4 WR 233..................................................................... 13.17 xxxii

Table of Cases Lee v Luper [1936] 3 All ER 817................................................................... 13.51 Lee v Showmen’s Guild of Great Britain [1952] 2 QB 329, [1952] 1 All ER 1175, [1952] 1 TLR 1115................................. 1.10, 2.21, 5.27, 5.28, 5.102, 7.12, 7.20, 7.25, 7.26 Lens v Devonshire Club (1914, unreported)................................................. 1.10 Leslie & Godwin Investments Ltd v Prudential Assurance Co Ltd (1987) 283 EG 1565............................................................................................... 15.20 Linnett v Metropolitan Police Commissioner [1946] KB 290, [1946] 1 All ER 380....................................................................................................... 18.14 Lipinski’s Will Trusts, Re [1976] 1 Ch 235, [1976] 3 WLR 522, [1977] 1 All ER 33......................................................................................................... 8.27 Lister v Hesley Hall Ltd [2001] UKHL 22, [2002] 1 AC 215, [2001] 2 WLR 1311, [2001] 2 All ER 769, [2001] ICR 665, [2001] IRLR 472, [2001] Emp LR 819, [2001] 2 FLR 307, [2001] 2 FCR 97, (2001) 3 LGLR 49, [2001] ELR 422, [2001] Fam Law 595, (2001) 98(24) LSG 45, (2001) 151 NLJ 728... 13.32 Liverpool City Council v Irwin [1977] AC 239, [1976] 2 WLR 562, [1976] 2 All ER 39, (1984) 13 HLR 38, 74 LGR 392, (1976) 32 P & CR 43, (1976) 238 EG 879.......................................................................................... 15.7 Lloyd v Grace Smith & Co [1912] AC 716................................................... 13.34 Lloyd v McMahon [1987] AC 625, [1987] 2 WLR 821, [1987] 1 All ER 1118, 85 LGR 545, [1987] RVR 58, (1987) 84 LSG 1240, (1987) 137 NLJ 265....................................................................................................... 7.23 Lloyds Bank Ltd v Rees see Rees (dec’d), Re Local Government Board v Arlidge [1915] AC 120....................................... 7.17 Lock v Connell Estate Agents [1994] ICR 983, [1994] IRLR 444.................... 16.51 Lo-Line Electric Motors Ltd, Re [1988] Ch 477, [1988] 3 WLR 26, [1988] 2 All ER 692, (1988) 4 BCC 415, [1988] BCLC 698, [1988] PCC 236, [1988] 2 FTLR 107, (1988) 138 NLJ Rep 119......................................... 5.33 Lomax v Lomax [2019] EWCA Civ 1467, [2019] 1 WLR 6527, [2019] Costs LR 1431, [2020] WTLR 191................................................................... 19.50 London Association for the Protection of Trade v Greenlands Ltd [1916] 2 AC 15............................................................................... 13.30, 13.65, 19.7 London County Council v Wilkins (Valuation Officer) [1957] AC 362, [1956] 3 WLR 505, [1956] 3 All ER 38, (1956) 120 JP 481, 54 LGR 427, 1 RRC 88, 49 R & IT 495................................................................................. 17.44 London Export Corp v Jubilee Coffee Roasting Co Ltd [1958] 1 WLR 661, [1958] 2 All ER 411, [1958] 1 Lloyd’s Rep 367...................................... 2.19 Longdon-Griffiths v Smith [1951] 1 KB 295, [1950] 2 All ER 662, 66 TLR (Pt 2) 627.................................................................................................. 13.65 Lord Napier and Ettrick v RF Kershaw Ltd [1997] LRLR 1, [1996] CLC 1875. 2.27 Luxury Leisure Ltd v Gambling Commission [2015] LLR 122........................ 12.5 Lyons, Sons & Co v Gulliver [1914] 1 Ch 631, CA........................................ 13.42 Lyttelton v Blackburne (1876) 45 LJ Ch 219..................... 1.69, 2.1, 5.1, 5.27, 7.19 M Macaura v Northern Assurance Co Ltd [1925] AC 619................................. 8.19 McDonald v Fernandez [2003] EWCA Civ 1219, [2004] 1 WLR 1027, [2003] 4 All ER 1033, [2004] HLR 13, [2004] L & TR 5, [2003] 3 EGLR 22, [2003] 42 EG 128, (2003) 100(34) LSG 33, [2003] NPC 107, [2004] 1 P & CR DG3.......................................................................................... 15.37 McDonald’s Hamburgers Ltd v Windle (1986) 151 JP 333............................ 10.26 MacFarlane v Glasgow City Council [2001] IRLR 7....................................... 16.2 xxxiii

Table of Cases McInnes v Onslow-Fane [1978] 1 WLR 1520, [1978] 3 All ER 211................ 14.4 M’Laughlin v Pryor (1842) 4 M & G 48....................................................... 13.36 Malik v Bank of Credit and Commerce International SA [1998] AC 20, [1997] 3 WLR 95, [1997] 3 All ER 1, [1997] ICR 606, [1997] IRLR 462, (1997) 94(25) LSG 33, (1997) 147 NLJ 917.......................................... 16.8 Manfield & Sons Ltd v Botchin [1970] 2 QB 612, [1970] 3 WLR 120, [1970] 3 All ER 143, (1970) 21 P & CR 587...................................................... 15.14 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, [1997] 2 WLR 945, [1997] 3 All ER 352, [1997] CLC 1124, [1997] 1 EGLR 57, HL....................................................................................... 2.20 Mansell v Viscount Cobham see Badger, Re March (Valuation Officer) v Gravesend and Northfleet Football Club Ltd (1959) 4 RRC 299................................................................................. 17.48 Maritime Stores Ltd v HP Marshall & Co Ltd [1963] 1 Lloyd’s Rep 602......... 13.2 Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173, [1969] 2 WLR 1, [1968] 3 All ER 732, [2010] BTC 103.......................... 13.33 Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021........... 19.10, 19.25 Masiak v City Restaurants (UK) Ltd [1999] IRLR 780..................................... 16.50 Mason v Harris (1879) 11 Ch D 97, CA........................................................ 13.25 Mason v Langford (1888) 4 TLR 407............................................................ 13.51 Matania v National Provincial Bank Ltd [1936] 2 All ER 633, CA................... 13.35 Mattis v Pollock (t/a Flamingos Nightclub) [2003] EWCA Civ 887, [2003] 1 WLR 2158, [2004] 4 All ER 85, [2003] ICR 1335, [2003] IRLR 603, [2004] PIQR P3, [2003] LLR 718........................................................... 13.33 Maund v Penwith District Council [1984] ICR 143, [1984] IRLR 24, (1984) 134 NLJ 147......................................................................................... 16.48 Mayflower Theatre Trust Ltd v R & C Comrs [2006] EWCA Civ 116, [2007] STC 880, [2007] BTC 5221, [2007] BVC 190, [2007] STI 413, (2007) 104(10) LSG 30.................................................................................... 17.35 MCA Records Inc v Charly Records Ltd (No 5) [2001] EWCA Civ 1441, [2002] BCC 650, [2003] 1 BCLC 93, [2002] ECDR 37, [2002] EMLR 1, [2002] FSR 26....................................................................................... 13.70 Medicaments and Related Classes Goods (No 2), Re [2001] 1 WLR 700, [2001] UKCLR 550, [2001] ICR 564, [2001] HRLR 17, [2001] UKHRR 429, (2001) 3 LGLR 32, (2001) 98(7) LSG 40, (2001) 151 NLJ 17......... 7.20 Mercantile Marine Service Association v Toms [1916] 2 KB 243, CA............. 13.65 Merrifield Ziegler & Co v Liverpool Cotton Association [1911] 105 LT 97.... 2.16 Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1, [1946] 2 All ER 345, (1946) 79 Ll L Rep 569, 62 TLR 533, 115 LJ KB 465, 175 LT 270.................................................................... 13.33 MF Global UK Ltd, Re [2016] EWCA Civ 569................................................ 4.33 Milharbour Management Ltd v Weston Homes Ltd [2011] EWHC 661 (TCC), [2011] 3 All ER 1027, (2011) 161 NLJ 509................................. 19.8 Miller v Jackson [1977] QB 966, [1977] 3 WLR 20, [1977] 3 All ER 338........ 13.44 Minnit v Lord Talbot de Malahide (1876) LR 1 Ir 143; (1881) LR 7 Ir 407..... 13.19 Mint v Good [1951] 1 KB 517, [1950] 2 All ER 1159, 49 LGR 495............... 15.7 Mitchell v Georges [2014] UKPC 43............................................................. 7.21 Mitchell v Watkinson [2014] EWCA Civ 1472, [2015] L & TR 22.................. 15.3 Modahl v British Athletic Federation Ltd (No 2) [2001] EWCA Civ 1447, [2002] 1 WLR 1192, (2001) 98(43) LSG 34, CA.................... 4.33, 7.24, 14.6, 14.10 Mohamud v Wm Morrison Supermarkets plc [2014] EWCA Civ 116, [2014] 2 All ER 990, [2014] IRLR 386, [2014] ICR D19..................................... 13.33 xxxiv

Table of Cases Moon v Atherton [1972] 2 QB 435, [1972] 3 WLR 57, [1972] 3 All ER 145, CA........................................................................................................ 19.30 Moore v Elphick [1945] 2 All ER 155............................................................ 12.39 Morgan v Driscoll (1922) 38 TLR 251.......................................................... 2.26 Morris v CW Martin & Sons Ltd [1966] 1 QB 716, [1965] 3 WLR 276, [1965] 2 All ER 725, [1965] 2 Lloyd’s Rep 63.................................................... 13.34 Morris Motors Athletic and Social Club Ltd v Fraser (unreported, 20 December 2006).................................................. 5.57, 5.60, 5.61, 7.28, 7.29 Mount Cook Land Ltd v Rosen [2003] 1 EGLR 75, [2003] 10 EG 165........... 15.16 Mousell Bros Ltd v London & North Western Railway Co [1917] 2 KB 836....................................................................................................... 18.13 Mucelli v Albania [2009] UKHL 2, [2009] 1 WLR 276, [2009] 3 All ER 1035, [2009] Extradition LR 122, HL............................................................... 6.12 Mulholland v St Peter’s, Roydon, Parochial Church Council [1969] 1 WLR 1842, [1969] 2 All ER 1233................................................................... 6.27 Muman v Nagasena [2000] 1 WLR 299, [1999] 4 All ER 178, CA........ 19.17, 19.37 Murray v Johnstone (1896) 23 R 981..................................................... 8.3, 8.5 N Nagle v Fielden [1966] 2 QB 633, [1966] 2 WLR 1027, [1966] 1 All ER 689, CA........................................................................................ 4.2, 14.2, 14.10 Nahhas v Pier House (Cheyne Walk) Management (1984) Times, 10 February............................................................................................... 13.34 Nance v British Columbia Electric Railway Co Ltd [1951] AC 601, [1951] 2 All ER 448, [1951] 2 TLR 137, PC.......................................................... 13.57 National Bank of Greece SA v RM Outhwaite 317 Syndicate at Lloyd’s [2001] CP Rep 69, [2001] CLC 591, [2001] Lloyd’s Rep IR 652......................... 19.8 National Car Parks Ltd v Trinity Development Co (Banbury) Ltd [2001] EWCA Civ 1686, [2002] 2 P & CR 18, [2002] L & TR 24, [2002] 1 P & CR DG19.............................................................................................. 15.14 National Deposit Friendly Society Trustees v Skegness Urban District Council [1959] AC 293, [1958] 3 WLR 172, [1958] 2 All ER 601, (1958) 122 JP 399, 56 LGR 313, 3 RRC 92, 51 R & IT 474........................................... 17.54 National Dwellings Society v Sykes [1894] 3 Ch 159.................................... 6.28 National Rivers Authority (Southern Region) v Alfred McAlpine Homes East Ltd [1994] 4 All ER 286, [1994] Env LR 198, (1994) 158 JPN 390, [1994] EG 10 (CS), [1994] NPC 6.................................................................... 18.12 Nell v Longbottom [1894] 1 QB 767........................................................... 6.38 Network Rail Infrasructure Ltd v Williams [2018] EWCA Civ 1514, [2019] QB 601, [2018] 3 WLR 1105, [2018] Env LR 35, [2018] CILL 4169... 13.39, 13.46 Neville Estates Ltd v Madden [1962] Ch 832, [1961] 3 WLR 999, [1961] 3 All ER 769............................................................................................. 8.6 New University Club (Duty on Estate), Re (1887) 18 QBD 720.................... 2.8 Newport Association Football Club v Football Association of Wales Ltd [1995] 2 All ER 87, (1994) 144 NLJ 1351.............................................. 14.10 Newport Playgoers’ Society v Newport County Borough Council (1957) 1 RRC 279, (1957) 50 R & IT 149............................................................ 17.54 News of the World v Friend [1973] 1 WLR 248, [1973] 1 All ER 422, [1973] Crim LR 237.......................................................................................... 12.40 Newton-le-Willows Cricket, Bowling, Tennis, Hockey and Rugby Union Football Club v Newton-le-Willows Urban District Council’s Rating Officers (1966) 64 LGR 228, 197 EG 667, [1966] RA 69, [1966] RVR 120, 12 RRC 32....... 1.1 xxxv

Table of Cases Noble v Harrison [1926] 2 KB 332............................................................... 13.46 Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co Ltd [1894] AC 535....................................................................................................... 14.10 Norris (t/a J Davis & Son) v Checksfield [1991] 1 WLR 1241, [1991] 4 All ER 327, [1991] ICR 632, (1991) 23 HLR 425, (1992) 63 P & CR 38, [1992] 1 EGLR 159, [1992] 01 EG 97, [1991] EG 45 (CS), (1991) 141 NLJ 707..................................................................................... 15.46, 15.48 North Harrow Tennis Club, Re see Hardy v Hoade North of England Zoological Society v Chester Rural District Council [1959] 1 WLR 773, [1959] 3 All ER 116, (1959) 123 JP 469, 57 LGR 252, 5 RRC 49, 52 R & IT 450................................................................................. 17.54 North-West Transportation Co v Beatty (1887) 12 App Cas 589........ 13.25, 13.28 Notting Hill Trust v Roomus [2006] EWCA Civ 407, [2006] 1 WLR 1375, [2007] HLR 2, [2006] L & TR 23........................................................... 15.37 O O’Brien v Clement (1846) 153 ER 1141, (1846) 16 M & W 159.................. 13.59 O’Reilly v Cock[1981] 260 EG 293............................................................... 17.46 O’Sullivan (Valuation Officer) v English Folk Dance and Song Society [1955] 1 WLR 907, [1955] 2 All ER 845, (1955) 119 JP 484, 53 LGR 549, 48 R & IT 471............................................................................................... 17.54 Orchard v Lee [2009] EWCA Civ 295, [2009] ELR 178, [2009] PIQR P16, (2009) 159 NLJ 552.............................................................................. 13.41 Osborn v Parole Board see Reilly’s Application for Judicial Review, Re Over Seventies Housing Association v Westminster London Borough Council (1974) 230 EG 1593............................................................................. 17.52 Overton v Hewett (1886) 3 TLR 246...................................... 13.12, 13.13, 13.15 Owen v Northampton Borough Council (1992) 156 LG Rev 23................... 5.66 Oxfam v Birmingham City District Council [1976] AC 126, [1975] 2 WLR 874, [1975] 2 All ER 289, 73 LGR 442................................................... 17.52 Oxford v Lincoln [1982] 1 WLUK 310, (1982) Times, 1 March..................... 18.14 P P (a minor) v National Association of School Masters Union of Women Teachers (NASUWT) [2003] UKHL 8, [2003] 2 WLR 545, [2003] 2 AC 663, [2003] 1 All ER 993, [2003] ICR 386, [2003] IRLR 307, [2003] ELR 357, (2003) 100(17) LSG 27, (2003) 153 NLJ 350................................ 7.15 Panchaud Frères SA v Etablissements General Grain Co [1970] 1 Lloyd’s Rep 53, CA.................................................................................................. 7.17 Panter v Rowellian Football Social Club [2011] EWHC 1301 (Ch), [2012] Ch 125, [2011] 3 WLR 1147, [2014] BCC 321, [2011] 2 BCLC 610............ 3.47 Panton v Brophy [2019] EWHC 1534 (Ch), [2019] L & TR 24, [2019] 2 P & CR DG24.............................................................................................. 15.5 Park Promotion Ltd (t/a Pontypool Rugby Football Club) v Welsh Rugby Union Ltd [2012] EWHC 1919 (QB)...................................................... 1.10 Parr v Bradbury (1885) 1 TLR 285, (1885) 1 TLR 525, CA............................ 13.8 Patent File Co, ex p Birmingham Banking Co, Re [1870] LR 6 Ch App 83.... 5.51 Pavlides v Jensen [1956] Ch 565, [1956] 3 WLR 224, [1956] 2 All ER 518.... 13.25 Payne v Bradley [1962] AC 343, [1961] 2 QB 44, [1961] 3 WLR 281, [1961] 2 All ER 882, (1961) 125 JP 514, 59 LGR 364............................... 12.15, 12.37 xxxvi

Table of Cases Peak (Valuation Officer) v Burley Golf Club [1960] 1 WLR 568, [1960] 2 All ER 199, (1960) 124 JP 296, 58 LGR 191, 6 RRC 73, 53 R & IT 277........ 17.45 Penn v Bristol & West of England Building Society [1997] 1 WLR 1356, [1997] 3 All ER 470, [1997] 3 FCR 789, (1997) 74 P & CR 210, [1997] EG 54 (CS), (1997) 94(18) LSG 32........................................................ 13.15 Pennard Golf Club v Richards (Valuation Officer) [1976] RA 203.................. 17.45 Pepper v Hart [1993] AC 593, [1992] 3 WLR 1032, [1993] 1 All ER 42, [1992] STC 898, [1993] ICR 291, [1993] IRLR 33, [1993] RVR 127, (1993) 143 NLJ 17, [1992] NPC 154..................................................... 11.13 Percival v Wright [1902] 2 Ch 421............................................................... 5.35 Performing Right Society v Rangers Football Club Supporters Club 1974 SC 49, 1974 SLT 151, Ct of Sess................................................................. 11.5 Perrott & Perrott Ltd v Stephenson [1934] Ch 171...................................... 6.44 Philippe v Cameron [2012] EWHC 1040 (Ch), [2012] 1 WLR 3487, [2012] 3 All ER 746, [2012] WTLR 1275, [2012] 19 EG 95 (CS).......................... 8.8 Phonogram Ltd v Lane [1982] QB 938, [1981] 3 WLR 736, [1981] 3 All ER 182, [1981] Com LR 228, [1982] 3 CMLR 615...................................... 13.27 Pilot v Craze (1884) 4 TLR 453.................................................................... 13.13 Pimlico Plumbers Ltd v Smith [2018] UKSC 29, [2018] 4 All ER 641, [2018] ICR 1511, [2018] IRLR 872.................................................................... 16.84 Pink v Scudamore, Hicks and Sleigh (1981) 172 ER 882, (1831) 5 Car & P 71......................................................................................................... 13.5 Pinn v Rew (1916) 32 TLR 451..................................................................... 13.36 Plummer v Royal Herbert Freehold Ltd [2018] 5 WLUK 527......................... 15.45 Pnaiser v NHS England [2016] IRLR 170....................................................... 16.78 PNPF Trust Co Ltd v Taylor [2010] EWHC 1573 (Ch).................................... 2.27 Polkey v AE Dayton Services Ltd [1988] AC 344, [1987] 3 WLR 1153, [1987] 3 All ER 974, [1988] ICR 142, [1987] IRLR 503, (1987) 137 NLJ 1109, (1988) 138 NLJ Rep 33......................................................................... 16.54 Porter v Magill [2001] UKHL 67, [2002] 2 AC 357, [2002] 2 WLR 37, [2002] 1 All ER 465, [2002] HRLR 16, [2002] HLR 16, [2002] BLGR 51, (2001) 151 NLJ 1886, [2001] NPC 184............................................................ 7.21 Preston v Green Close Ltd (1975) 139 JP 245.............................................. 10.26 Printers and Transferrers Amalgamated Trades Protection Society, Re [1899] 2 Ch 184.............................................................................................. 3.17 Prole v Allen [1950] 1 All ER 476............................................................ 5.65, 5.66 Propert v Parker (1832) 40 ER 107, (1832) 3 My & K 280............................ 15.8

R R v Adomako [1995] 1 AC 171, [1994] 3 WLR 288, [1994] 3 All ER 79, (1994) 99 Cr App R 362, (1994) 158 JP 653, [1994] 5 Med LR 277, [1994] Crim LR 757, (1994) 158 JPN 507, (1994) 144 NLJ 936............ 18.26 R v Army Board of the Defence Council, ex p Anderson [1992] QB 169, [1991] 3 WLR 42, [1991] 3 All ER 375, [1991] ICR 537, [1991] IRLR 425, (1991) 3 Admin LR 297, [1991] COD 191, CA...................... 7.17, 14.5 R v Ashton (1852) 118 ER 444, (1852) 1 El & Bl 286................................... 12.1 R v Barnes [2004] EWCA Crim 3246, [2005] 1 WLR 910, [2005] 2 All ER 113, [2005] 1 Cr App R 30, [2005] Crim LR 381, (2005) 102(4) LSG 30....... 13.55 R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte [2000] 1 AC 119, [1999] 2 WLR 272, [1999] 1 All ER 577, 6 BHRC 1, (1999) 11 Admin LR 57, (1999) 96(6) LSG 33, (1999) 149 NLJ 88........ 7.20 xxxvii

Table of Cases R v Brent Health Authority, ex p Francis [1985] QB 869, [1984] 3 WLR 1317, [1985] 1 All ER 74, (1985) 82 LSG 36................................................... 5.8 R v Brown [1994] 1 AC 212, [1993] 2 WLR 556, [1993] 2 All ER 75, (1993) 97 Cr App R 44, (1993) 157 JP 337, (1993) 157 JPN 233, (1993) 143 NLJ 399................................................................................................ 13.55 R v Chief Constable of Devon and Cornwall, ex p Central Electricity Generating Board [1982] 1 QB 458, [1981] 3 WLR 967, [1981] 3 All ER 826, CA................................................................................................ 6.22 R v Commissioner for Local Administration, ex p Croydon London Borough Council [1989] 1 All ER 1033, 87 LGR 221, [1989] COD 226, (1989) 153 LG Rev 131.................................................................................... 14.13 R v Cooper (1869–70) LR 5 QB 457............................................................. 6.39 R v Disciplinary Committee of the Jockey Club, ex p Aga Khan [1993] 1 WLR 909, [1993] 2 All ER 853, [1993] COD 234, (1993) 143 NLJ 163, CA.... 7.25, 14.2, 14.4 R v Disciplinary Committee of the Jockey Club, ex p Massingberd-Mundy [1993] 2 All ER 207, (1990) 2 Admin LR 609, [1990] COD 260, CA...... 14.2 R v Gough [1993] AC 646, [1993] 2 WLR 883, [1993] 2 All ER 724, (1993) 97 Cr App R 188, (1993) 157 JP 612, [1993] Crim LR 886, (1993) 157 JPN 394, (1993) 143 NLJ 775............................................................... 14.11 R v Governors of Dunraven School, ex p B (a child) [2000] BLGR 494, [2000] ELR 156, (2000) 97(4) LSG 32, CA........................................................ 7.20 R v Green (1829) 109 ER 76, (1829) 9 B & C 203........................................ 17.46 R v Jockey Club, ex p RAM Racecourses Ltd [1993] 2 All ER 225, (1991) 5 Admin LR 265, [1990] COD 346, CA.............................................. 14.2, 14.9 R v Law Society, ex p Kingsley [1995] Lexis Citation 3122............................ 14.9 R v Lear [2018] EWCA Crim 69, [2018] 2 Cr App R 11, [2018] ICR 1775..... 18.4, 18.7, 18.9 R v Liverpool City Council, ex p Professional Association of Teachers (1984) Times, 22 March............................................................................. 5.25, 6.55 R v Ministry of Defence, ex p Murray [1998] COD 134, DC......................... 14.5 R v Panel on Take-overs and Mergers, ex p Datafin plc [1987] QB 815, [1987] 2 WLR 699, [1987] 1 All ER 564, (1987) 3 BCC 10, [1987] BCLC 104, [1987] 1 FTLR 181........................................................................ 14.8 R v Rector and Churchwardens of Birmingham (1837) 112 ER 467, (1837) 7 A & E 254.......................................................................................... 6.39 R v Rector, Churchwardens, and Parishioners of St Mary, Lambeth (1838) 112 ER 873, (1838) 8 A & E 356........................................................... 6.39 R v RL & JF [2008] EWCA (Crim) 1970, [2009] 1 All ER 786, [2009] 1 Cr App R 16, [2009] Env LR 7, [1009] Crim LR 381, (2008) 105(35) LSG 24..... 1.1, 13.18, 17.49, 18.4, 18.5, 18.6, 18.7, 18.9, 18.17, 18.33 R v Rochdale Metropolitan Borough Council, ex p Cromer Ring Mill Ltd [1982] 3 All ER 761............................................................................... 14.13 R v Secretary of State for the Environment, ex p Hillingdon London Borough Council [1986] 1 WLR 192, [1986] 1 All ER 810, (1986) 52 P & CR 409, [1987] RVR 6, (1986) 83 LSG 525, (1986) 136 NLJ 16........................... 6.33 R v Secretary of State for Social Services, ex p Child Poverty Action Group [1990] 2 QB 540, [1989] 3 WLR 1116, [1989] 1 All ER 1047, (1989) 86(41) LSG 41...................................................................................... 14.9 R v Secretary of State for Transport, ex p Factortame Ltd (No 2) [1991] 1 AC 603, [1990] 3 WLR 818, [1991] 1 All ER 70, [1991] 1 Lloyd’s Rep 10, [1990] 3 CMLR 375, (1991) 3 Admin LR 333, (1990) 140 NLJ 1457..... 14.14 xxxviii

Table of Cases R v Secretary of State for Transport, ex p Factortame Ltd (No 5) [2000] 1 AC 524, [1999] 3 WLR 1062, [1999] 4 All ER 906, [1999] 3 CMLR 597, [2000] Eu LR 40, (1999) 96(43) LSG 32, [1999] NPC 126..................... 14.14 R v Souter [1971] 1 WLR 1187, [1971] 2 All ER 1151, (1971) 55 Cr App R 403....................................................................................................... 18.14 R v Turner [1910] 1 KB 346, CA................................................................... 6.12 R v Tyler [1891] 2 QB 588........................................................................... 18.11 R v W Stevenson & Sons (a partnership) [2008] EWCA Crim 273, [2008] Bus LR 1200, [2008] 2 Cr App R 14, [2008] Lloyd’s Rep FC 266.................. 18.2 R v Warwickshire County Council, ex p Collymore [1995] ELR 217, [1995] COD 52................................................................................................ 14.13 R v West Middlesex Waterworks (1859) 28 LJMC 135.................................. 17.48 R v Wimbledon Local Board (1882) 8 QBD 459, CA..................................... 6.39 R v Winson [1969] 1 QB 371, [1968] 2 WLR 113, [1968] 1 All ER 197, CCA... 18.13 R v Zaman [2017] EWCA Crim 1783, [2018] 1 Cr App R (S) 26................... 18.26 R (on the application of Beer (t/a Hammer Trout Farm)) v Hampshire Farmers Markets Ltd [2003] EWCA Civ 1056, [2004] 1 WLR 233, [2004] UKHRR 727, [2003] LLR 681, [2003] 31 EG 67 (CS), (2003) 100(36) LSG 40.... 14.8 R (on the application of Boyle) v Haverhill Pub Watch [2009] EWHC 2441 (Admin), [2010] LLR 93........................................................................ 1.9 R (on the application of the British Beer and Pub Association) v Canterbury City Council [2005] EWHC 1318 (Admin), (2005) 169 JP 521, [2006] BLGR 596, [2005] LLR 353, (2005) 169 JPN 859, [2005] NPC 82.......... 9.39 R (on the application of Cowl) v Plymouth City Council [2001] EWCA Civ 1935, [2002] 1 WLR 803, [2002] CP Rep 18, [2002] ACD 11, [2002] Fam Law 265, (2002) 99(8) LSG 35...................................................... 14.12 R (on the application of Holmcroft Properties Ltd) v KPMG LLP [2016] EWHC 323 (Admin), [2017] Bus LR 932, [2016] 2 BCLC 545, [2016] ACD 67.... 14.9 R (on the applicaion of Mullins) v Jockey Club Appeal Board (No 1) [2005] EWHC 2197 (Admin), [2006] LLR 151, [2006] ACD 2........................... 14.2 R (on the application of Robertson) v Wakefield Metropolitan District Council [2001] EWHC Admin 915, [2002] QB 1052, [2002] 2 WLR 889, [2002] BLGR 286, [2002] ACD 40, (2002) 99(2) LSG 28.................................. 5.96 R (on the application of X) v Chief Constable of the West Midlands [2004] EWHC 61 (Admin), [2004] 1 WLR 1518, [2004] 2 All ER 1, [2004] Po LR 96, (2004) 101(6) LSG 31, (2004) 154 NLJ 146.................................... 7.20 R & C Comrs v Bridport and West Dorset Golf Club Ltd [2012] UKUT 272 (TCC), [2012] STC 2244, [2012] BVC 1758, [2012] STI 2552............... 17.34 Raggett v Musgrave (1827) 172 ER 252, (1827) 2 Car & P 556,.................. 2.6 Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, [2012] 1 All ER 1137, [2012] 1 All ER (Comm) 1, [2012] Bus LR 313, [2012] 1 Lloyd’s Rep 34, [2011] 2 CLC 923, 138 Con LR 1.................................. 2.20 Ranken v Hunt (1894) 38 Sol Jo 290, DC..................................................... 15.10 Ratcliff v McConnell [1999] 1 WLR 670, (1999) 1 LGLR 276, [1999] PIQR P170, (1999) 96(3) LSG 32................................................................... 13.52 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, [1968] 2 WLR 775, [1968] 1 All ER 433, [2010] BTC 49.............................................................................. 13.33, 16.2 Recher’s Will Trusts, Re [1972] Ch 526, [1971] 3 WLR 321, [1971] 3 All ER 401........................................................................................... 8.3, 8.6, 8.27 Reda v Flag Ltd [2002] UKPC 38, [2002] IRLR 747....................................... 16.42 Rees (dec’d), Re, [1954] Ch 202, [1954] 2 WLR 59, [1954] 1 All ER 7.......... 8.29 Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134, [1942] 1 All ER 378........... 13.25 xxxix

Table of Cases Reilly’s Application for Judicial Review, Re [2013] UKSC 61, [2014] AC 1115, [2013] 3 WLR 1020, [2014] 1 All ER 369, [2014] NI 154, [2014] HRLR 1.................................................................................................. 7.17 Richardson v London Borough of Ealing [2005] EWCA Civ 1798, [2006] CP Rep 19, [2006] HLR 13.......................................................................... 7.37 Richardson-Gardner v Fremantle (1870) 24 LT 81........................................ 5.28 Ridge v Baldwin [1964] AC 40, [1963] 2 WLR 935, [1963] 2 All ER 66, (1963) 127 JP 295, (1963) 127 JP 251, 61 LGR 369, 234 LT 423, 113 LJ 716................................................................................................. 7.20, 14.5 Rigby v Connol (1880) 14 Ch D 482, CA............................................... 1.10, 5.27 RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] EWCA Civ 270, [2002] 1 WLR 2344, [2002] CLC 905, 83 Con LR 99, (2002) 18 Const LJ 425, [2002] CILL 1841, (2002) 99(15) LSG 33......................................................................................................... 19.48 Robert Addie & Sons (Collieries) Ltd v Dumbreck [1929] AC 358, 1929 SC (HL) 51, 1929 SLT 242.......................................................................... 13.52 Robertson v British Gas Corp [1983] ICR 351, [1983] IRLR 302.................... 16.7 Robertson v Ridley [1989] 1 WLR 872, [1989] 2 All ER 474, CA............ 5.63, 5.64, 5.66, 13.49 Robinson v Jermyn (1814) 145 ER 1314, (1814) 1 Price 11.......................... 13.59 Robson v Hallett [1967] 2 QB 939, [1967] 3 WLR 28, [1967] 2 All ER 407, (1967) 51 Cr App R 307, (1967) 131 JP 333......................................... 13.51 Roche v Sherrington [1982] 1 WLR 599, [1982] 2 All ER 426....................... 19.26 Roy v Kensington and Chelsea and Westminster Family Practitioner Committee [1992] 1 AC 624, [1992] 2 WLR 239, [1992] 1 All ER 705, [1992] IRLR 233, (1992) 4 Admin LR 649, [1992] 3 Med LR 177, (1992) 142 NLJ 240......................................................................................... 14.14 Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378, [1995] 3 WLR 64, [1995] 3 All ER 97, [1995] BCC 899, (1995) 92(27) LSG 33, (1995) 145 NLJ 888................................................................................................ 5.37 Royal Mail Estates v Maple Teesdale (a firm) [2015] EWHC 1890 (Ch), [2016] 1 WLR 942, [2015] BCC 647..................................................... 13.27 Royal Photographic Society of Great Britain v City of Westminster and Cane (Valuation Officer) [1957] 2 RRC 169.................................................... 17.54 Royal Society for the Prevention of Cruelty to Animals v Attorney-General [2002] 1 WLR 448, [2001] 3 All ER 530, [2001] UKHRR 905, (2001) 98(11) LSG 43................................................................................ 2.2, 7.6 Royal Society for the Protection of Birds v Hornsea Urban District Council (1974) 232 EG 583............................................................................... 17.52 Russell v Duke of Norfolk [1949] 1 All ER 109, 65 TLR 225........................... 14.2 Russell Institution, Re [1898] 2 Ch 72.......................................... 1.64, 3.44, 8.23 Russo-Chinese Bank v Li Yau Sam [1910] AC 174, PC................................... 13.15 Rylands v Fletcher liability (1868) LR 3 HL 330............................................. 13.44 S St Andrew’s Allotment Association, Re [1969] 1 WLR 229, [1969] 1 All ER 147, (1969) 20 P & CR 404................................................... 3.17, 8.3, 8.12 St James Club, Re (1852) 42 ER 920, (1852) 2 de GM & G 383.... 1.11, 3.19, 3.44, 7.2, 8.3, 13.12 Salomon v Salomon & Co Ltd [1897] AC 22.......................................... 1.26, 8.17 Sanderson v Hi Peak Property Ltd [2014] EWHC 4918 (Ch)......................... 3.22 Saner v Bilton (1878) 7 Ch D 815................................................................ 15.7 xl

Table of Cases Saunders v Edwards [1987] 1 WLR 1116, [1987] 2 All ER 651, [2008] BTC 7119, (1987) 137 NLJ 389, CA............................................................. 18.31 Scadding v Lorant (1851) 10 ER 164, (1851) 3 HL Cas 418......................... 6.28 Scarf v Jardine (1882) 7 App Cas 345, [1882] All ER Rep 651....................... 13.8 Secretary of State for Trade and Industry v Creegan [2001] EWCA Civ 1742, [2004] BCC 835, [2002] 1 BCLC 99, CA............................................... 3.53 Secretary of State for Trade and Industry v Deverell [2001] Ch 340, [2000] 2 WLR 907, [2000] 2 All ER 365, [2000] BCC 1057, [2000] 2 BCLC 133, (2000) 97(3) LSG 35, CA...................................................................... 5.32 Secretary of State for Trade and Industry v Hollier [2006] EWHC 1804 (Ch), [2007] Bus LR 352, [2007] BCC 11....................................................... 5.32 Segal Securities Ltd v Thoseby [1963] 1 QB 887, [1963] 2 WLR 403, [1963] 1 All ER 500.......................................................................................... 15.12 Selangor United Rubber Estates Ltd v Craddock (No 3) [1968] 1 WLR 1555, [1968] 2 All ER 1073, [1968] 2 Lloyd’s Rep 289.................................... 5.37 Sharp v Dawes (1876) 2 QBD 26................................................................. 6.33 Sheffield & Hallamshire Lawn Tennis Club Ltd v Elliott (Valuation Officer) [1966] RA 370...................................................................................... 17.48 Sheldon v RHM Outhwaite (Underwriting Agencies) Ltd [1996] AC 102, [1995] 2 WLR 570, [1995] 2 All ER 558, [1995] 2 Lloyd’s Rep 197, [1995] CLC 655, (1995) 92(22) LSG 41, (1995) 145 NLJ 687............... 19.42 Shore v Ministry of Works [1950] 2 All ER 228, CA................................. 5.63, 5.68 Shrimpton v General Council of the Bar [2005] 11 WLUK 318..................... 7.24 Sick and Funeral Society of St John’s Sunday School, Golcar, Re [1973] Ch 51, [1972] 2 WLR 962, [1972] 2 All ER 439............... 1.10, 2.1, 2.6, 3.2, 6.13, 7.3, 7.4, 7.8, 7.9, 8.3, 8.12 Smedleys Ltd v Breed [1974] AC 839, [1974] 2 WLR 575, [1974] 2 All ER 21, 72 LGR 563, [1974] Crim LR 309.......................................................... 10.26 Smith v Marrable (1843) 152 ER 693, (1843) 11 M & W 5.......................... 15.7 Smith v Nairn Golf Club [2007] CSOH 136, 2007 SLT 909, [2007] LLR 764... 14.8 SmithKline Beecham plc v Avery [2007] EWHC 948 (QB)........ 19.22, 19.25, 19.28 Smoldon v Whitworth [1996] EWCA Civ 1225, [1997] ELR 249, [1997] PIQR P133..................................................................................................... 13.54 Smyth v Darley (1849) 9 ER 1293, (1849) 2 HL Cas 789.............................. 6.10 Soltau v De Held (1851) 61 ER 291, (1851) 2 Sim NS 133........................... 13.42 Spearman v Royal United Bath Hospitals NHS Foundation Trust [2017] EWHC 3027 (QB), [2018] Med LR 244.................................................. 13.51 Speechley v Allott [2014] EWCA Civ 230, [2014] LLR 817...... 1.9, 6.10, 6.11, 7.14 Spencer v Taylor [2013] EWCA Civ 1600, [2014] HLR 9, [2014] L & TR 21, [2014] 1 EGLR 27................................................................................. 15.37 Spencer’s Case (1582) 5 Co Rep 16a........................................................... 15.6 Spring v Guardian Assurance plc [1995] 2 AC 296, [1994] 3 WLR 354, [1994] 3 All ER 129, [1994] CLC 766, [1994] ICR 596, [1994] IRLR 460, (1994) 91(40) LSG 36, (1994) 144 NLJ 971.......................................... 16.78 Squibb v Vale of the White Horse District Council [1982] RA 271................. 17.46 Stafford Borough Council v Elkenford Ltd [1977] 1 WLR 324, [1977] 2 All ER 519, 75 LGR 337, CA...................................................................... 1.1, 4.1 Stamford Working Men’s Club (1952) Times, 24 October; (1953) Times, 29 April, CA............................................................................................... 3.17 Standard Chartered Bank v Pakistan National Shipping Corp (Nos 2 and 4) [2002] UKHL 43, [2003] 1 AC 959, [2002] 3 WLR 1547, [2003] 1 All ER 173, [2002] 2 All ER (Comm) 931, [2003] 1 Lloyd’s Rep 227, [2002] BCC 846, [2003] 1 BCLC 244, [2002] CLC 1330, (2003) 100(1) LSG 26........ 13.70 xli

Table of Cases Stansfield v Ridout (1889) 5 TLR 656........................................................... 13.17 Steele v Gourley (1886) 3 TLR 118; (1887) 3 TLR 772, CA.............. 1.9, 1.11, 13.5, 13.13, 13.17 Stoddart v Sagar [1895] 2 QB 474............................................................... 12.39 Stoke on Trent Repertory Players Trustees v Stoke-on-Trent Corp (1957) 1 RRC 353............................................................................................... 17.54 Stone v Taffe [1974] 1 WLR 1575, [1974] 3 All ER 1016, CA........................ 13.51 Street v Mountford [1985] AC 809, [1985] 2 WLR 877, [1985] 2 All ER 289, (1985) 17 HLR 402, (1985) 50 P & CR 258, [1985] 1 EGLR 128, (1985) 274 EG 821, [2008] BTC 7094, (1985) 82 LSG 2087, (1985) 135 NLJ 460.............................................................................................. 15.4, 15.46 Stringfellow Restaurants Ltd v Quashie [2012] EWCA Civ 1735, [2013] IRLR 99......................................................................................................... 16.2 Sturges v Bridgman (1879) 11 Ch D 852, (1879) 43 JP 716, (1879) 48 LJ Ch 785, (1879) 41 LT 219................................................................ 11.24, 13.44 Surrey Garden Village Trust Ltd, Re [1965] 1 WLR 974, [1964] 3 All ER 962.... 3.21 Sussex Motor Yacht Club Ltd v Gilmore (Valuation Officer) [1966] RA 43..... 17.48 T Tanner v Tanner [1975] 1 WLR 1346, [1975] 3 All ER 776, (1975) 5 Fam Law 193, CA................................................................................................ 15.47 Tanussi v Molli (1886) 2 TLR 731................................................................. 7.19 Tarry v Ashton (1876) 1 QBD 314................................................................ 13.46 Taylor v Speed [1979] Crim LR 114.............................................................. 18.14 Tesco Supermarkets Ltd v Nattrass [1972] AC 153, [1971] 2 WLR 1166, [1971] 2 All ER 127, 69 LGR 403........................................................... 18.24 Tetley v Chitty [1986] 1 All ER 663............................................................... 13.43 Texas Homecare Ltd v Stockport Metropolitan Borough Council (1987) 152 JP 83, [1987] Crim LR 709, (1988) 152 JPN 110, CA............................. 18.25 Thellusson v Viscount Valentia [1907] 2 Ch 1, CA........................................ 2.28 Thompson v Park [1944] KB 408, [1944] 2 All ER 477, CA........................... 15.47 Tiedemann and Ledermann Frères Arbitration, Re [1899] 2 QB 66............... 13.14 Tierney v Tough [1914] 1 IR 142............................................................... 8.3, 8.7 Tobacco Trade Benevolent Association, Re [1958] 1 WLR 1113, [1958] 3 All ER 353............................................................................................ 2.22, 2.23 Tod v Swim Wales [2018] EWHC 665 (QB).................................................. 14.7 Todd v Emly (1841) 151 ER 832, (1841) 7 M & W 427, (1841) 10 LJ Ex 161.............................................................................. 5.44, 5.61, 13.6, 13.12 Todd v Emly (1841) 151 ER 1138, (1841) 8 M & W 505, (1841) 10 LJ Ex 262............................................................................................... 5.61, 13.6 Tomlinson v Congleton Borough Council [2003] UKHL 47, [2004] 1 AC 46, [2003] 3 WLR 705, [2003] 3 All ER 1122, [2004] PIQR P8, [2003] 32 EG 68 (CS), (2003) 100(34) LSG 33(2003) 153 NLJ 123............................ 13.52 Tomlinson v Plymouth Argyle Football Club (1960) 175 EG 1023, 6 RRC 173, (1960) 53 R & IT 297.................................................................... 17.48 Torbock v Lord Westbury [1902] 2 Ch 871.................................................. 6.29 Transco plc v Stockport Metropolitan Borough Council [2003] UKHL 61, [2004] 2 AC 1, [2003] 3 WLR 1467, [2004] 1 All ER 589, 91 Con LR 28, [2004] Env LR 24, [2003] 48 EG 127 (CS), (2003) 153 NLJ 1791.......... 13.42 Trebanog Working Men’s Club and Institute Ltd v MacDonald [1940] 1 KB 576, [1940] 1 All ER 454................................................................. 1.18, 9.3 Trevett v Lee [1955] 1 WLR 113, [1955] 1 All ER 406, CA............................. 13.57 xlii

Table of Cases Trewby v C & E Comrs [1976] 1 WLR 932, [1976] 2 All ER 199, [1976] STC 122....................................................................................................... 17.33 Tucker v British Leyland Motor Corp Ltd [1978] IRLR 493............................ 16.16 Turner’s Will Trusts, Re [1937] Ch 15, [1936] 2 All ER 1435.......................... 8.29 TW Lawrence & Sons Ltd v Burleigh (1981) 146 JP 134............................... 10.26 U Uber BV v Aslam [2018] EWCA Civ 2748, [2019] 3 All ER 489, [2019] RTR 25, [2019] ICR 845, [2019] IRLR 257.................................................... 16.84 United Service Share Purchase Society Ltd, Re [1909] 2 Ch 526................... 3.34 V Val de Lobo (Turismo) Limitada v Chandler (unreported, 2 October 1997)..... 1.1 Vane v Yiannopoullos [1965] AC 486 [1964] 3 WLR 1218, [1964] 3 All ER 820, (1965) 129 JP 50, 63 LGR 91, [1965] Crim LR 401........................ 18.13 Ventouris v Mountain (The Italia Express) (No 1) [1991] 1 WLR 607, [1991] 3 All ER 472, [1991] 1 Lloyd’s Rep 441.................................................. 19.10 Verrall v Great Yarmouth Council [1981] QB 202, [1980] 3 WLR 258, [1980] 1 All ER 839, CA.................................................................................... 15.47 Verrall v Hackney London Borough Council [1983] QB 445, [1983] 2 WLR 202, [1983] 1 All ER 277, (1983) 147 JP 41, 81 LGR 217, CA...... 13.49, 17.47 Vowles v Evans [2003] EWCA Civ 318, [2003] 1 WLR 1607, [2003] ECC 24, [2003] PIQR P29, (2003) 100(20) LSG 28................................... 13.38, 13.53 W W Devis & Sons Ltd v Atkins [1977] AC 931, [1977] 3 WLR 214, [1977] 3 All ER 40, [1977] ICR 662, [1977] IRLR 314, (1978) 13 ITR 71................... 16.48 Wagon Mound, The (No 2) [1967] 1 AC 617, [1966] 3 WLR 498, [1966] 2 All ER 709, [1966] 1 Lloyd’s Rep 657..................................................... 13.44 Walker v Boyle [1982] 1 WLR 495, [1982] 1 All ER 634, (1982) 44 P & CR 20, (1982) 261 EG 1090, (1982) 79 LSG 954....................................... 13.19 Walker v Brewster (1867–68) LR 5 Eq 25...................................................... 13.42 Warnes v Trustees of Cheriton Oddfellows Social Club [1993] IRLR 58......... 16.44 Watford Corp v Maypole Ltd [1970] 1 QB 573, [1970] 2 WLR 220, [1970] 1 All ER 554, 67 LGR 101......................................................................... 10.26 West Midlands Co-operative Society v Tipton [1986] AC 536, [1986] 2 WLR 306, [1986] 1 All ER 513, [1986] ICR 192, [1986] IRLR 112, (1986) 83 LSG 780, (1986) 136 NLJ 163, HL......................................................... 16.48 West Sussex Constabulary’s Widows, Children and Benevolent (1930) Fund Trusts, Re [1971] Ch 1, [1970] 2 WLR 848, [1970] 1 All ER 544............. 2.11 Westbourne Supporters v Brennan [1995] STC (SCD) 137........................... 17.14 Westminster City Council v Tomlin [1989] 1 WLR 1287, [1990] 1 All ER 920, (1990) 154 JP 165, 88 LGR 29, [1990] RA 79, [1989] COD 235, (1990) 154 JPN 140, (1990) 154 LG Rev 156................................................... 17.47 Wheat v E Lacon & Co Ltd [1966] AC 552, [1966] 2 WLR 581, [1966] 1 All ER 582, [1966] RA 193, [1966] RVR 223..................................... 13.48, 13.50 Wheeler v Mercer [1957] AC 416, [1956] 3 WLR 841, [1956] 3 All ER 631... 15.14 Wheeler v Trustees of St Mary’s Hall, Chislehurst (1989) Times, 10 October... 13.48 White v Blackmore [1972] 2 QB 651, [1972] 3 WLR 296, [1972] 3 All ER 158, CA................................................................................................ 13.58 xliii

Table of Cases Wiles v Bothwell Castle Golf Club 2005 SLT 785.................................... 5.27, 7.12, 7.13, 7.24 Wilks v Cheltenham Homeguard Motor Cycle & Light Car Club [1971] 1 WLR 668, [1971] 2 All ER 369, CA......................................................... 13.56 William Denby & Sons Ltd Sick and Benevolent Fund, Re [1971] 1 WLR 973, [1971] 2 All ER 1196............................................................. 3.17, 3.18, 3.20 Williams v Curzon Syndicate Ltd (1919) 35 TLR 475, CA.............................. 16.77 Williams v Devon County Council [2015] EWHC 568 (Admin), [2015] LLR 624....................................................................................................... 1.13 Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830, [1998] 2 All ER 577, [1998] BCC 428, [1998] 1 BCLC 689, (1998) 17 Tr LR 152, (1998) 95(21) LSG 37, (1998) 148 NLJ 657, HL............................................... 13.70 Williams v Watson Luxury Coaches Ltd [1990] ICR 536, [1990] IRLR 164..... 16.42 Wilson v First County Trust Ltd (No 2) [2003] UKHL 40, [2004] 1 AC 816, [2003] 3 WLR 568, [2003] 4 All ER 97, [2003] 2 All ER (Comm) 491, [2003] HRLR 33, [2003] UKHRR 1085, (2003) 100(35) LSG 39............. 2.31 Wise v Perpetual Trustee Co Ltd [1903] AC 139, PC............... 1.1, 1.11, 3.32, 3.33, 8.30, 13.2, 13.19, 17.26, 19.29 Witney Town Football and Social Club, Re [1993] BCC 874, [1994] 2 BCLC 487................................................................................ 3.17, 3.45, 3.46, 3.47 Wood v Finch (1861) 175 ER 1135, (1861) 2 F & F 447............................... 13.11 Wood v Leadbitter (1845) 153 ER 351, (1845) 13 M & W 838.................... 15.47 Wood v McCarthy [1893] 1 QB 775............................................................ 19.27 Woodford v Smith [1970] 1 WLR 806, [1970] 1 All ER 1091 (Note)......... 4.1, 4.9, 6.42, 7.19, 19.9 Woodland v Essex County Council [2013] UKSC 66, [2014] AC 537, [2013] 3 WLR 1227, [2014] 1 All ER 482, [2014] ELR 67, [2014] PIQR P6, (2013) 163(7582) NLJ 15.............................................................. 5.70, 13.35 Wooldridge v Sumner [1963] 2 QB 43, [1962] 3 WLR 616, [1962] 2 All ER 978, CA................................................................................................ 13.56 Worthing Rugby Football Club Trustees v IRC [1985] 1 WLR 409, [1985] STC 186, [1985] PCC 330, [1985] RVR 56, (1985) 82 LSG 1643........... 17.12 Wright v Michael Wright Supplies Ltd [2013] EWCA Civ 234, [2013] CP Rep 32, [2013] 4 Costs LO 630.................................................................... 19.43 Wyatt v Kreglinger [1933] 1 KB 793, CA...................................................... 1.10 Wynn v Skegness Urban District Council [1967] 1 WLR 52, [1966] 3 All ER 336, (1966) 130 JP 404, 12 RRC 220.................................................... 17.52 Wynn Realisations Ltd v Vogue Holdings Inc [1999] STC 524, [1999] BTC 5224, [1999] BVC 245.......................................................................... 17.25 Y Young v Higgon (1840) 151 ER 317, (1840) 6 M & W 49............................ 6.12 Young v Ladies Imperial Club Ltd [1920] 1 KB 81; [1920] 2 KB 523, CA....... .......................................5.27, 5.28, 5.39, 6.10, 6.13, 7.14, 7.15, 7.30 Young v Sherman (2001) 40 ACSR 12 (NSW Supreme Ct)........................... 6.29 Z Zoan v Rouamba [2000] 1 WLR 1509, [2000] 2 All ER 620, [2000] CCLR 18, (2000) 150 NLJ 99, CA......................................................................... 6.12 xliv

Table of Cases Zoological Society of London v C & E Comrs (Case C-267/00) [2002] QB 1252, [2002] 3 WLR 829, [2002] STC 502, [2002] ECR I-3293, [2002] 2 CMLR 12, [2002] All ER (EC) 480, [2002] CEC 330, [2002] BTC 5205, [2002] BVC 395, [2002] STI 354........................................................... 17.35

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Table of Statutes

[All references are to paragraph numbers.] A Ancient Monuments and Archaeological Areas Act 1979................................... 1.66 Anti-social Behaviour, Crime and Policing Act 2014................ 15.31 ss 43–58................................. 9.61 s 44........................................ 9.61 ss 76–79................................. 9.49 s 181...................................... 9.61 Sch 11 para 34............................... 9.61 Arbitration Act 1996.................. 19.44 s 5.......................................... 19.45 9................................ 5.101, 19.45 (4)..................................... 19.45 28(1)................................... 19.44 61(1), (2)............................. 19.44 65........................................ 19.44 81(1)(b)............................... 19.45 B Banking and Financial Dealings Act 1971............................. 9.54 Benefit Societies and Credit Unions Act 2010................. 1.19 Betting and Gaming Duties Act 1981 Sch 3...................................... 12.37 para 2................................. 12.37 C Capital Allowances Act 2001...... 17.13 Charities Act 1993..................... 1.45 s 4.......................................... 17.52 96........................................ 17.52 Charities Act 2006............... 1.45, 8.27 Charities Act 2011....... 1.43, 1.45, 3.11, 6.3, 17.52 s 2.......................................... 1.43 (1)(b)............................ 1.43, 1.44

Charities Act 2011 – contd s 3(1)................................ 1.43, 1.44 (2)(b)................................. 1.48 4..................................... 1.43, 1.44 5.......................................... 1.44 41........................................ 18.16 Pt 6 (ss 61–116)..................... 8.11 s 84(2)................................... 6.8 115(2), (3), (5), (8).............. 19.17 173...................................... 18.16 191...................................... 8.30 Pt 11 (ss 204–250)............ 1.45, 1.46 s 205(1)................................. 1.45 (3)................................. 3.39 ss 224–227............................. 2.39 s 229...................................... 1.24 234...................................... 1.42 ss 235, 239............................ 3.11 240, 243............................ 3.11 s 346...................................... 18.16 Children and Young Persons Act 1933 s 7(1)..................................... 12.61 Civil Partnerships Act 2004........ 15.33 s 261...................................... 9.53 Sch 27.................................... 9.53 Common Law Procedure Act 1852 s 212...................................... 15.12 Commonhold and Leasehold Reform Act 2002 Pt 1(ss 1–70).......................... 15.3 Communications Act 2003........ 11.16 s 363(1), (2)........................... 11.23 364(2)(c)............................. 11.23 365(2)................................. 11.23 366...................................... 11.23 368...................................... 11.23 (1)................................. 11.23 ss 368A–368R......................... 11.23 Companies Act 1980 s 1(2)..................................... 1.30 Companies Act 1985........... 1.62, 6.58

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Table of Statutes Companies Act 1985 – contd s 1(1)..................................... 2.37 7(1)..................................... 2.37 36C..................................... 13.27 727...................................... 13.25 Companies Act 2006.... 1.6, 1.25, 1.33, 1.45, 1.61, 2.38, 5.7, 5.36, 6.2, 6.3, 6.12, 6.15, 6.57, 13.26, 17.4, 17.7, 19.16, 19.36 s 3.......................................... 3.35 (2)....................... 1.26, 1.27, 3.36 (3)................................ 1.30, 3.37 5.......................................... 1.30 6.......................................... 2.38 7.......................................... 1.40 8(1)..................................... 2.37 11........................................ 1.26 (3).............................. 1.30, 3.37 15(1)................................... 3.9 16(2)................................... 1.26 (3)........................ 8.17, 19.15, 19.32, 19.35 17(a).................................... 1.33 18(3)(a)............................... 2.37 19(1), (2), (3)...................... 2.37 20(1)(a)............................... 2.37 21.................................. 2.37, 2.38 (1)................................... 6.45 22........................................ 2.37 (3)................................... 2.37 28(1)................................... 1.33 31(1)............................. 2.37, 5.51 33(1)................................... 2.37 40(1)................................... 13.26 (5)................................... 13.24 42(1)................................... 13.26 51............................... 13.20, 13.27 (1)................................... 13.27 53........................................ 2.12 77(1)(a)............................... 6.45 113...................................... 4.9 (1), (2)........................... 5.100 114...................................... 4.9 115(1)................................. 5.100 116(1), (3)........................... 5.100 117(3)................................. 5.100 154................................... 5.2, 5.32 155...................................... 5.32 167(1), (4)........................... 1.39 171.............................. 5.35, 13.24 172................................ 5.32, 5.35 (1)(b)............................. 5.38

Companies Act 2006 – contd s 172(1)(d)............................. 5.35 173...................................... 5.35 174(1)................................. 5.35 (2)................................. 5.36 ss 175, 176, 177.................... 5.35 s 232(1)................................. 13.25 233...................................... 13.25 234...................................... 13.25 (3)................................. 13.25 239(6)(a)............................. 13.25 250...................................... 5.32 270(1)................................. 1.33 Pt 13 Ch 1 (ss 281–285A) s 281...................................... 6.57 282................................. 1.33, 6.57 (1)................................. 6.45 283................................. 1.33, 6.57 (1)................................. 6.45 ss 284, 285, 285A.................. 6.57 Pt 13 Ch 2 (ss 288–300)......... 6.57, 6.58 s 288...................................... 1.33 (1), (2)........................... 6.58 (3)(a), (b)....................... 6.58 (5)................................. 6.58 ss 289–300............................. 1.33 s 296(3)................................. 6.58 297(1)(a), (b)....................... 6.58 ss 298, 299............................ 6.58 s 300...................................... 6.58 Pt 13 Ch 3 (ss 301–335)......... 6.57 ss 302–306............................. 6.57 s 305(1)................................. 6.8 ss 307–313............................. 6.57 s 307(1)................................. 6.12 (2)(a)............................. 6.12 (3)................................. 6.12 (4)–(6)........................... 1.33 308...................................... 6.15 313...................................... 6.14 ss 314–317............................. 6.57 318–323............................. 6.57 s 318...................................... 6.33 319................................... 5.7, 6.26 322(3)................................. 5.18 ss 324–331............................. 6.57 s 332................................ 6.28, 6.57 ss 333–333A........................... 6.57 s 336(1)................................. 1.33 Pt 13 Ch 6 (ss 355–359)......... 6.57 s 355(1), (2)........................... 6.49 358(3)................................. 6.49

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Table of Statutes Companies Act 2006 – contd Pt 13 Ch 7 (ss 360–361) s 360................................ 6.12, 6.57 360A.............................. 6.57, 6.59 382...................................... 17.9 (3)................................. 1.34 384A.................................... 1.35 386...................................... 5.37 393................................ 5.37, 17.7 396...................................... 5.37 415...................................... 5.37 415A(1)............................... 1.36 416...................................... 5.37 442(2)(a)............................. 17.7 ss 444–444A........................... 1.39 s 444...................................... 17.9 475...................................... 5.18 477...................................... 5.18 (2)................................. 5.18 485...................................... 5.18 (1)............................ 1.33, 5.18 489...................................... 5.18 542(1)................................. 1.29 561...................................... 1.29 567(1)................................. 1.29 641...................................... 1.29 Pt 18 Ch 1 (ss 658–676)......... 1.29 s 684(4)................................. 1.29 685(4)................................. 1.29 Pt 18 Ch 4 (ss 690–708)......... 1.29 ss 853A–853L......................... 1.39 s 900...................................... 3.9 (2)(a)............................. 3.23 (d)........................ 3.9, 3.23 (f).............................. 3.9 (6)................................. 3.9 994...................................... 19.45 1000(1), (3), (4), (5)............ 3.23 1003(1)–(2), (3), (4), (5)...... 3.23 1012.................................... 8.20 1041(1)............................... 8.23 ss 1121–1133......................... 18.16 s 1139(1)............................... 19.15 1157.................................... 13.25 1168.................................... 6.15 1070.................................... 17.14 Companies (Audit, Investigation and Community Enterprise) Act 2004...................... 1.37, 17.11 ss 7–10................................... 2.38 Pt 2 (ss 26–63)....................... 1.37 s 26(2)................................... 1.37 27........................................ 1.37

Companies (Audit, Investigation and Community Enterprise) Act 2004 – contd s 30........................................ 1.37 32(4)(e)............................... 1.37 33(1)................................... 1.41 ss 36–39................................. 3.10 s 36........................................ 1.41 36A(2)(b)............................. 1.41 ss 38, 38A, 39........................ 1.41 s 45........................................ 1.37 Schs 1–3................................ 2.38 Companies (Consolidation) Act 1908................................... 2.12 Company Directors Disqualifica­ tion Act 1986 s 6.......................................... 3.53 11........................................ 5.23 15........................................ 3.52 22E...................................... 3.50 22F...................................... 3.57 Consumer Credit Act 1974........ 4.30, 5.46, 19.3 s 8(1), (3)............................... 5.46 10(1)................................... 5.46 16B(1)(a)............................. 5.46 75(1)................................... 5.46 189(1)................................. 5.46 Consumer Credit Act 2006........ 4.30 s 1(b)..................................... 5.46 2(1)(a)................................. 5.46 4.......................................... 5.46 Sch 2...................................... 5.46 Consumer Rights Act 2015........ 13.19, 13.58 Pt 1 (ss 1–60)......................... 13.19 s 3.......................................... 13.19 ss 31, 33................................ 13.19 47, 48................................ 13.19 s 57........................................ 13.19 Contrary to the Licensing Act 1961 s 22(1)................................... 18.13 Contrary to the Licensing Act 1964 s 160(1)................................. 18.13 161(1)................................. 18.13 Conveyancing and Law of Property Act 1892............... 8.25 Co-operative and Community Benefit Societies Act 2014... 1.6, 1.14, 1.20, 1.21, 1.22, 1.42, 1.61, 3.3, 3.50, 5.19, 5.104, 8.14, 9.11, 9.36, 17.6

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Table of Statutes Co-operative and Community Benefit Societies Act 2014 – contd s 125...................................... 3.49 126................................. 1.21, 3.49 Pt 10 (ss 127–133)................. 18.16 ss 134–136............................. 1.24 137–140............................. 1.21 s 137(3), (6), (7).................... 5.104 138...................................... 5.104 140(1)................................. 5.104 149...................................... 13.20 151................................. 1.19, 1.42 Sch 4 para 1................................. 6.3 Sch 5...................................... 1.42 Sch 7...................................... 1.19 Co-operative, Community Bene­ fit Societies and Credit Unions Act 2010................. 1.19 Copyright Act 2011................... 11.2 Copyright, Designs and Patents Act 1988..................... 11.2, 18.35 s 1.......................................... 11.2 ss 3, 4.................................... 11.2 5A, 5B................................ 11.2 6, 8.................................... 11.2 s 12........................................ 11.8 ss 13A, 13B............................ 11.8 14, 15................................ 11.8 s 16(1)(e)............................... 11.2 21(1)................................... 11.2 ss 28A, 28B............................ 11.3 29, 29A.............................. 11.3 30, 30A.............................. 11.3 s 31........................................ 11.3 67(4)................................... 11.6 72........................................ 11.6 ss 96, 97................................ 11.9 s 107(2A), (2B), (3)................ 11.10 Corporation Tax Act 2009.......... 1.25, 17.12 Corporation Tax Act 2010.......... 1.47 Pt 6 Ch 1 (ss 189–217)........... 17.18 ss 217A–217D........................ 17.19 s 442...................................... 17.6 Pt 11 (ss 466–517)................. 17.18 ss 658–671..................... 1.47, 17.19 s 658...................................... 2.40 (1)–(1C)......................... 1.49 (1B)(a), (b)..................... 1.49 (1C)............................... 1.49 (2), (3)........................... 1.58

Co-operative and Community Benefit Societies Act 2014 – contd s 2(1)(b)................................. 1.19 (2)(a)(ii)............................. 1.19 3..................................... 1.21, 3.50 (2)(b)................................. 1.23 (3)........................... 19.14, 19.34 (5)..................................... 1.21 5.......................................... 3.21 7.......................................... 3.21 (4)..................................... 3.21 10(1)................................... 2.12 (2)–(4)............................. 1.23 14........................................ 2.36 (2)................................... 2.36 (5)............................... 2.36, 6.1 (6)...................... 5.2, 5.21, 5.31 (7)................................... 8.15 (8)................................... 5.50 (9)................................... 8.15 (10)................................. 5.18 (11)................................. 8.15 (12), (14)......................... 8.14 15........................................ 1.21 27........................................ 1.21 30........................................ 4.9 31........................................ 4.13 34........................................ 1.21 37(1), (4)............................. 8.15 43(4)................................... 13.20 45........................................ 13.20 50(1)................................... 3.8 57........................................ 13.20 ss 65–66................................. 3.49 s 75........................................ 1.21 81........................................ 1.21 83........................................ 5.18 ss 84–86................................. 5.18 s 89........................................ 1.21 90........................................ 1.22 106...................................... 6.8 109(1), (2), (3).................... 3.8 110...................................... 3.21 ss 112–117............................. 1.24 s 119...................................... 3.21 (2)(d)............................. 8.16 120...................................... 3.21 ss 121–122............................. 3.21 123–124............................. 3.49 s 123................................. 3.21, 3.49 (1)................................. 3.34 124(1)(a), (b), (c), (d), (e)..... 3.34 l

Table of Statutes Data Protection Act 2018 – contd ss 1–28................................... 5.92 s 1.......................................... 5.82 2.......................................... 5.87 4(2)..................................... 5.87 6.......................................... 5.91 (2)..................................... 5.91 ss 10, 11.......................... 5.87, 5.90 s 12........................................ 5.93 14(4)................................... 5.94 15........................................ 5.90 21(4)................................... 5.88 ss 29–54................................. 5.90 32, 33................................ 5.90 s 50........................................ 5.94 55........................................ 5.88 67........................................ 5.94 ss 82–113............................... 5.90 s 108...................................... 5.94 115...................................... 5.82 119...................................... 18.16 ss 144, 148............................ 18.16 s 149...................................... 5.92 154...................................... 5.92 ss 170, 171, 173.................... 18.16 s 180...................................... 5.82 184...................................... 18.16 198...................................... 18.16 ss 209, 210............................ 5.91 s 212...................................... 5.82 Schs 1–4................................ 5.90 Sch 1 para 31............................... 5.87 Sch 2 paras 1–3............................ 5.90 Sch 3 Pt 2 (paras 6–15)................ 5.90 paras 26, 27, 28.................. 5.90 Schs 6–11.............................. 5.90 Sch 9 para 6................................. 5.87 Sch 15.................................... 5.92 para 15............................... 18.16 Defamation Act 1996................ 13.61 s 1.......................................... 13.63 ss 2–4..................................... 13.61 Defamation Act 2013...... 13.60, 13.61, 13.64 s 1.......................................... 13.60 ss 2, 3........................... 13.60, 13.61 s 4.......................................... 13.60 5.......................................... 13.60 (1), (2), (3)........................ 13.64

Corporation Tax Act 2010 – contd s 658(4)(b)............................. 1.49 (5)................................. 1.58 659...................................... 2.40 (1)................................. 1.50 (2)(d)............................. 1.51 (2A), (3)......................... 1.50 660...................................... 2.40 (1)(a), (b), (ba), (c)........ 1.53 (2), (3)........................... 1.53 (4)–(4A)......................... 1.54 (5)................................. 1.54 (a), (b)....................... 5.26 660A.............................. 1.56, 2.40 661...................................... 2.40 (1), (2)........................... 1.48 (3)................................. 17.19 ss 661A, 661B........................ 1.49 s 661CA........................... 1.49, 1.55 ss 662–665............................. 17.19 662, 663............................ 1.55 s 670(a)–(b)........................... 1.58 671...................................... 1.58 1071(5)............................... 17.12 1121.................................... 17.6 (1)........................ 17.1, 17.12 Corporate Insolvency and Governance Act 2020......... 6.3 Sch 14 para 4................................. 6.3 Corporate Manslaughter and Corporate Homicide Act 2007................................... 18.34 s 1(1), (2)............................... 18.34 21........................................ 18.34 Sch 1...................................... 18.34 County Courts Act 1984 s 38........................................ 7.26 138...................................... 15.12 Credit Unions Act 1979............. 1.6 s 1.......................................... 1.6 (1)(d)................................. 1.6 4(2)................................ 2.32, 6.46 Criminal Law Act 1977 s 6(1)..................................... 15.49 D Data Protection Act 1998...... 5.9, 5.11, 5.82, 5.89, 5.96 Data Protection Act 2018.... 5.82, 5.84, 5.89, 5.93, 6.18, 6.53 li

Table of Statutes Employment Rights Act 1996 – contd s 94(1)................................... 16.45 95(1)................................... 16.45 97(1)................................... 16.47 98(1), (2)............................. 16.49 (4).......................... 16.51, 16.59 100(1)(e)............................. 16.50 105...................................... 16.59 108(1)................................. 16.45 (3)(b), (c), (f), (g), (gg)... 16.47 111(2)................................. 16.53 ss 114, 115............................ 16.54 s 116(1), (2)........................... 16.54 117...................................... 16.54 118(1)................................. 16.54 119............................. 16.54, 16.57 123(1)................................. 16.54 (6)................................. 16.55 124(1A)............................... 16.54 135...................................... 16.57 139(1)................................. 16.56 ss 140, 141............................ 16.58 s 155...................................... 16.57 164(1)................................. 16.59 203(1)........................ 16.44, 16.56 207B.......................... 16.13, 16.33, 16.53, 16.70 212(1), (3)........................... 16.9 218(2), (4), (5), (6).............. 16.10 227(1)........................ 16.54, 16.57 230...................................... 16.82 (1)................................. 16.45 Enterprise Act 2004 s 32........................................ 2.38 Enterprise and Regulatory Reform Act 2013 s 69(1), (3)............................. 16.37 Environmental Protection Act 1990......................... 11.24, 18.35 s 79(1)(g)............................... 11.24 80........................................ 11.24 Equality Act 1970............ 16.72, 16.74 Equality Act 2010......... 1.51, 2.11, 4.2, 4.19, 4.21, 4.22, 4.39, 5.71, 5.79, 6.43, 7.40, 14.15, 15.39, 15.42, 16.60, 16.61, 16.69, 16.72, 16.75 s 4.......................................... 4.20 6.......................................... 9.21 (1)–(2)............................... 5.78 8(1)..................................... 16.61

Defamation Act 2013 – contd s 8.......................................... 13.65 15........................................ 13.65 Defective Premises Act 1967...... 19.41 Defective Premises Act 1972...... 13.48, 15.30 s 3.......................................... 15.30 4.......................................... 15.30 (2)..................................... 15.30 Deregulation Act 2015.............. 15.37 s 68(1)................................... 9.53 69........................................ 9.62 72(b)................................... 9.25 (c).................................... 9.59 Sch 18 para 3................................. 9.62 Digital Economy Act 2017 s 32........................................ 11.10 Disability Discrimination Act 1995................................... 16.60 E Electronic Communications Act 2000................................... 6.15 Employers’ Liability (Compulsory Insurance) Act 1969............ 16.41 Employment Relations Act 1999 s 10........................................ 16.52 18(1)................................... 16.46 Employment Rights Act 2002 s 20........................................ 16.19 Employment Rights Act 1996.... 16.44, 16.46, 16.56 s 1(1), (3)–(5)......................... 16.6 2(1)..................................... 16.7 3.......................................... 16.6 (2)..................................... 16.6 12........................................ 16.42 13(1)................................... 16.22 14........................................ 16.22 15........................................ 16.22 (1)................................... 16.22 23........................................ 16.22 (4)................................... 16.22 27(1), (2)............................. 16.22 ss 43A, 43B............................ 16.36 43C–43H............................ 16.36 s 44........................................ 16.35 ss 50, 52, 55.......................... 16.32 71–75................................. 16.24 s 72........................................ 16.25 86(2)................................... 16.42 lii

Table of Statutes Equality Act 2010 – contd s 60(5)................................... 16.71 (6)................................... 16.69 ss 64–71................................. 16.62 s 64(2)................................... 16.73 65............................... 16.72, 16.73 66........................................ 16.72 67(1)................................... 16.72 69........................................ 16.74 (1)(b)............................... 16.74 ss 72–76................................. 16.62 s 77............................... 16.62, 16.75 78........................................ 16.62 Pt 7 (ss 100–107)..... 4.19, 4.26, 5.71 s 100(1)................................. 4.20 101(1)(a)–(c)....................... 4.23 (2)(a)............................. 5.72 (b)............................. 7.40 (d)............................. 5.72 (3)(a)............................. 5.73 (b)............................. 7.40 (d)............................. 5.73 (4)(a)............................. 5.74 (b)............................. 4.24 (c)............................. 5.74 (5)(a), (b), (c)................ 4.25 (6)(a)............................. 7.40 (b)............................. 5.72 (d)............................. 5.72 (7)(a)............................. 5.73 (b)............................. 7.40 (d)............................. 5.73 102(1)(a)–(c)....................... 5.75 (c)............................. 5.79 (2), (3)........................... 5.76 (4)(a)–(c)....................... 5.75 (5)................................. 5.76 103(2)................... 4.24, 5.74, 5.76 107(2)(a), (b)....................... 4.20 (3)................................. 4.20 (4)(a), (b)....................... 4.20 (5)................................. 4.20 (6)................................. 5.73 109...................................... 16.64 113(1)................................. 4.26 114(1)(d)............................. 4.26 (6)(a)............................. 4.26 (7)................................. 4.26 118(1)................................. 4.26 119(2)................................. 4.26 (4)......................... 4.26, 16.70 (5)–(6), (7)..................... 4.26 123(1)................................. 16.70

Equality Act 2010 – contd s 9(1)(b)................................. 4.21 13(1), (2)..................... 4.23, 16.65 14(1), (2)............................. 4.23 15(1)(b)............................... 4.23 18........................................ 16.65 19........................................ 16.66 (1)–(2)............................. 4.23 (2)(a)–(c), (d)................... 4.23 20(2)–(5)............................. 5.78 (3), (4), (5)...................... 5.78 (13)................................. 5.78 21(1), (2)............................. 5.78 23........................................ 16.65 26(1)........................... 4.24, 16.67 (2), (3)............................. 4.24 (5)......................... 15.42, 16.67 27(1)........................... 4.25, 16.68 (2)................................... 4.25 (3)................................... 16.68 (4)................................... 4.25 Pt 3 (ss 28–31)....................... 9.51 s 29................................ 9.51, 15.45 Pt 4 (ss 32–38)............. 15.39, 15.41 s 32(1)................................... 15.41 33(1)................................... 15.40 (a), (b), (c).................. 15.40 (3)................................... 15.42 (4)................................... 15.40 (a), (b), (c).................. 15.40 (6)................................... 15.42 35(1)................................... 15.43 (a), (b), (c).................. 15.43 (2)................................... 15.44 (3)................................... 15.43 (a), (b), (c).................. 15.43 (4)................................... 15.44 36........................................ 15.45 (1)(a), (d), (d).................. 15.45 (2)(a)............................... 15.45 (3)(a)............................... 15.45 (5)(a)............................... 15.45 (7)................................... 15.45 38(3)–(6)............................. 15.40 Pt 5 (ss 39–83)............. 16.62, 16.63 ss 39–40................................. 16.62 s 39(1), (2), (3), (4), (5)......... 16.63 40(1)................................... 16.63 53........................................ 14.15 54........................................ 14.15 (3)................................... 14.15 60........................................ 16.62 (1)(a)............................... 16.69 liii

Table of Statutes Finance Act 1997 s 10(3B), (3C), (4), (5)............ 12.9 Finance Act 1998 Sch 18 para 14............................... 17.17 paras 17, 18........................ 17.17 21–22........................ 17.7 Finance Act 2002 s 58........................................ 1.47 Sch 18.................................... 1.47 Finance Act 2003 ss 42, 43................................ 17.41 s 100(1)......................... 17.1, 17.41 ss 112–119............................. 17.41 Finance Act 2010 Sch 6...................................... 17.18 para 2(3)............................ 1.49 paras 30, 32........................ 1.49 Finance Act 2012 s 52........................................ 1.49 Finance Act 2013......... 1.50, 1.56, 4.18 Sch 21.................................... 1.54 para 2(2), (3), (4)................ 1.50 3(2)............................ 1.53 4................................. 1.49 5................................. 1.56 Financial Services and Markets Act 2000............................. 5.51 Fire Precautions Act 1971.......... 18.18 Food Act 1984 s 2.......................................... 10.24 Food Safety Act 1990......... 10.1, 10.3, 10.4, 10.5, 10.6, 10.7, 10.9, 10.17, 10.23, 18.23 s 1(1)..................................... 10.6 (3)..................................... 10.6 (a)................................. 10.6 2................................... 10.6, 10.24 (1)(a)................................. 10.6 (2)..................................... 10.9 7.......................................... 18.23 10(2)................................... 10.18 14.............................. 10.25, 18.23 15........................................ 18.23 20........................................ 18.24 21........................................ 18.25 35........................................ 18.23 Fraud Act 2006.......................... 18.31 Friendly Societies Act 1875 s 8(4)..................................... 1.14 Friendly Societies Act 1896........ 2.23 Friendly Societies Act 1974.... 1.6, 1.14, 1.16, 6.3, 9.11

Equality Act 2010 – contd s 123(3)(a), (b)....................... 16.70 124(2)(a), (b), (c)................ 16.70 (3)................................. 16.70 (b)............................. 16.70 (4), (5), (6), (7).............. 16.70 127(1)................................. 16.76 128...................................... 16.76 129(3)................................. 16.76 130(6)................................. 16.76 132(2)(a), (b)....................... 16.76 (4)................................. 16.76 135...................................... 16.75 136(2), (3)........................... 4.26 ss 142, 144............................ 5.71 193, 194............................ 4.22 s 195(1), (2), (3), (4).............. 5.77 197...................................... 4.23 212(1)................................. 5.78 Sch 1...................................... 5.78 para 2................................. 5.78 Sch 4...................................... 15.45 paras 5–7............................ 4.19 Schs 6–9................................ 16.62 Sch 8...................................... 16.69 Sch 9 para 1(a), (b), (c)................ 16.65 Sch 15.............................. 4.19, 5.71 para 2(2)–(5)...................... 4.21 (2), (3), (4), (5), (6)... 5.78 (7), (8)...................... 5.79 Sch 16.............................. 4.19, 5.71 para 1(1)............................ 4.22 (2)............................ 5.73 (3)............................ 5.75 (4)............................ 4.22 1A......................... 4.23, 5.74 2(3)............................ 5.81 (a), (b), (c), (d)..... 5.81 (4)............................ 5.81 (a), (b), (c)............ 5.81 Sch 21 para 2(1)(a)........................ 5.80 (3)............................ 5.80 3................................. 5.80 Equal Pay Act 1970.................... 16.60 European Communities Act 1972................................... 10.17 F Finance (No 2) Act 1992 s 7(2)..................................... 12.37 liv

Table of Statutes Friendly Societies Act 1992 – contd s 80........................................ 5.103 81........................................ 5.103 (1)................................... 19.48 93(2)................................... 1.14 Sch 3 para 8(1)............................ 3.33 Sch 16 para 1................................. 1.16 4(a)............................. 1.14 29............................... 3.20 32............................... 1.16 34......................... 3.20, 3.33 paras 37, 38, 39.................. 3.20 Sch 22 Pt 1..................................... 3.20

Friendly Societies Act 1974 – contd s 7(1)..................................... 1.14 (a)................................. 17.5 (b)–(f)............................ 1.14 7(2).................. 1.15, 2.35, 5.103, 19.13 (a)................................. 1.15 22........................................ 1.15 23........................................ 5.50 24(1)–(2), (3)–(4)................ 5.19 31(1), (2)–(5)....................... 5.18 46........................................ 1.15 48........................................ 1.15 52........................................ 1.15 s 54.......................... 1.15, 8.13, 15.5 (1)................................... 3.7 56........................................ 1.15 58.................................... 1.15, 3.7 ss 76–80................................. 5.103 s 76........................................ 1.15 79........................................ 1.15 82........................................ 3.20 (1)................................... 3.7 (2), (3), (5)...................... 3.20 84(1)................................... 1.16 84A...................................... 1.16 (1)................................. 1.16 86........................................ 3.20 (1)(b)............................... 3.20 87........................................ 3.20 (3)................................... 3.33 91........................................ 3.20 (1)................................... 3.20 93................................... 1.15, 3.20 (1)(a), (b), (c).................. 3.20 94........................................ 1.15 95A...................................... 3.20 ss 98–101............................... 18.16 s 103(1)....................... 19.13, 19.33 (3), (7)........................... 19.13 109(3)................................. 3.7 Sch 2................................. 2.35, 5.50 para 3(1)............................ 2.35 4............................. 2.35, 6.1 5.................... 5.2, 5.21, 5.31, 19.13 6........................... 1.15, 5.18 8................................. 1.15 9................................. 5.103 Sch 6A................................... 1.16 Friendly Societies Act 1992.... 1.6, 1.14, 5.19, 5.104, 9.11

G Gambling Act 2005............. 4.38, 12.1, 12.3, 12.8, 12.9, 12.15, 12.39, 18.15 Pt 1 (ss 1–19)......................... 12.12 s 1.......................................... 12.1 3.......................................... 12.2 4.......................................... 12.16 6(1), (2)............................... 12.6 (4)(a)................................. 12.6 (5)..................................... 12.6 8(2)..................................... 12.7 (a)................................. 12.7 9(1)..................................... 12.63 11........................................ 12.63 12........................................ 12.66 14........................................ 12.41 (1), (2), (3)...................... 12.39 (4)(b)............................... 12.41 (5)................................... 12.40 16(2), (3)............................. 12.66 17(3), (4)............................. 12.68 18(2), (3)............................. 12.67 19(1).......................... 12.15, 12.50 (3).......................... 11.16, 12.15 20........................................ 12.5 24............................... 12.5, 12.11 25........................................ 12.5 Pt 3 (ss 33–44)....................... 18.27 ss 33–36................................. 12.64 s 33................................. 12.8, 18.27 (2)................................... 18.27 ss 37–40................................. 12.64 Pt 3 (ss 46–64)....................... 18.27 lv

Table of Statutes Gambling Act 2005 – contd s 293(3)(b), (c)....................... 12.13 (5)................................. 12.13 Pt 14 (ss 295–302)................. 12.14 s 297(2), (3)........................... 12.14 299...................................... 12.17 300(2), (3), (7), (8).............. 12.16 Pt 15 (ss 303–326)................. 12.36 s 303(1)–(2)................. 12.36, 12.59 312(1)–(3), (4)..................... 12.36 314...................................... 12.59 344(1)(c)–(d)....................... 12.10 353(1)....................... 12.15, 12.37 Sch 1...................................... 12.63 Sch 2 paras 6, 7............................ 12.41 Sch 7 para 1(a)............................. 12.53 Sch 11.......................... 12.42, 12.44 para 1(2)............................ 12.69 paras 3, 4, 5, 6.................... 12.45 para 7(1), (2)...................... 12.45 10............................... 12.47 (2).......................... 12.69 13(1).......................... 12.48 paras 14, 15........................ 12.48 para 16(2).......................... 12.48 paras 18, 19........................ 12.48 para 30(1)(a)............ 12.50, 12.69 31..................... 12.49, 12.50 paras 32, 33, 34.................. 12.50 para 35(2).......................... 12.50 36(1), (2).................... 12.50 37(1), (2).................... 12.50 38............................... 12.50 39............................... 12.58 (1).......................... 12.50 Pt 5 (paras 41–56).............. 12.51 para 41............................... 12.52 paras 42–49........................ 12.53 para 48(b).......................... 12.53 50............................... 12.54 51............................... 12.56 paras 52, 53........................ 12.55 para 54(1)–(2).................... 12.57 (3).......................... 12.55 55............................... 12.58 Sch 12 paras 1–9............................ 12.28 para 6(1)(b)........................ 12.28 10............................... 12.29 paras 11–16........................ 12.30 17–20........................ 12.31

Gambling Act 2005 – contd s 45(1), (2)............................. 12.4 53........................................ 18.27 ss 54–55................................. 18.27 s 56(1)................................... 12.50 (b)............................... 12.47 (2)................................... 12.50 Pt 5 (ss 65–126)........... 12.42, 12.62 s 65(2)(b)............................... 12.37 75........................................ 12.5 80(9)................................... 12.37 89........................................ 12.16 98........................................ 12.62 100...................................... 12.62 Pt 9 (ss 214–234)................... 12.38 s 235(1), (2)........................... 12.20 236...................................... 12.20 242...................................... 12.20 248(1)(b)............................. 12.21 249(1)(b)............................. 12.22 252...................................... 12.42 253...................................... 12.48 256(1)................................. 12.45 (2)................................. 12.48 ss 258–263............................. 18.27 Pt 12 (ss 266–287)......... 12.1, 12.10, 12.23, 12.25, 12.27 s 266...................................... 12.3 (1)(c)............................. 1.1 (2)(a)............................. 12.9 267................................ 12.2, 12.3 (2)(a)............................. 12.9 268...................................... 1.1 269............................... 12.9, 12.25 (1)....................... 12.10, 12.37 (3), (5)........................... 12.10 (6)................................. 12.10 (a)............................. 12.10 270(3), (5)........................... 12.10 271(2)(a)............................. 12.25 (3)................................. 12.25 (4)(b), (c), (d)................ 12.26 (6)(a), (b)....................... 12.26 (7)(a), (b)....................... 12.26 272(2), (4)........................... 12.26 273(2)(a)............................. 12.23 (3)(a)............................. 12.24 (4)(a), (b)....................... 12.24 (5)................................. 12.24 275(1), (2), (3), (4), (6)....... 12.37 Pt 13 (ss 288–294)................. 12.12 s 288...................................... 12.12 293(3)(a)................... 12.12, 12.13 lvi

Table of Statutes Housing Act 1988 – contd s 5(1)..................................... 15.35 (2)........................... 15.31, 15.35 (3)(e)................................. 15.35 7.......................................... 15.31 (3), (4)..................... 15.31, 15.36 (6)..................................... 15.31 8................................ 15.27, 15.31, 15.36, 15.37 (1)(b)................................. 15.36 15........................................ 15.29 (2)................................... 15.29 16........................................ 15.29 17(1), (1B), (1C), (1D)......... 15.33 (4)................................... 15.33 19A...................................... 15.27 20........................................ 15.27 (1)................................... 15.32 20A...................................... 15.28 (1)................................. 15.28 (4)....................... 15.28, 18.28 21.................... 15.27, 15.37, 15.38 (1)(a)..................... 15.32, 15.37 (b)............................... 15.37 (4)(a)..................... 15.32, 15.37 (b)............................... 15.37 (4ZA)............................... 15.37 (4B)................................. 15.37 (5)......................... 15.32, 15.37 ss 27, 28................................ 15.49 s 29........................................ 18.28 Sch 1 paras 2, 3, 3A..................... 15.34 4, 6, 7, 8, 9................ 15.34 Sch 2............................ 15.27, 15.31 Grounds 3–7A..................... 15.31 Ground 7.................. 15.31, 15.33 7A.......................... 15.31 Grounds 8–17..................... 15.31 Sch 2A para 1................................. 15.27 Housing Act 1996........... 15.25, 15.26, 15.31 s 97........................................ 18.28 98........................................ 15.37 99.............................. 15.32, 15.37 Housing Act 2004............. 15.25, 15.26 ss 212–215............................. 15.38 s 213(5)................................. 15.38 214(3), (4)........................... 15.38 215...................................... 15.38 Sch 10 para 1(2), (3)...................... 15.38

Gambling Act 2005 – contd Sch 12 – contd para 21............................... 12.32 (1)(a)...................... 12.28 22............................... 12.32 23............................... 12.33 24............................... 12.31 25............................... 12.34 26............................... 12.30 Sch 16 para 20............................... 12.46 (3).......................... 11.16 Gaming Act 1968............ 12.15, 12.37 s 11(2)................................... 1.1 40(4)(c)............................... 1.1 41........................................ 12.14 Sch 3 para 7(1)............................ 1.1 H Health Act 2006........................ 18.30 Pt 1 (ss 1–13)......................... 18.30 s 2(1)..................................... 18.30 (2)–(3)............................... 18.30 (3), (4), (7)........................ 18.30 3(3)..................................... 18.30 6(1)..................................... 18.30 7(2)..................................... 18.30 8(4)..................................... 18.30 ss 10, 11................................ 18.30 s 76(6)................................... 18.6 Health and Safety at Work etc Act 1974.......... 9.38, 16.37, 16.38, 18.4, 18.18, 18.33 s 2(3)..................................... 16.38 3.......................................... 18.7 33............................... 16.37, 18.29 47(2)................................... 16.37 Sch 3A................................... 18.29 Health and Safety (Offences) Act 2008................................... 18.29 s 1.......................................... 18.29 Health and Social Care Act 2012 Sch 5 para 115(a)......................... 9.35 Housing Act 1985 s 8(1)..................................... 15.7 Housing Act 1988........... 15.25, 15.26, 15.27, 15.34, 15.48, 15.49, 18.28 s 1(1)(a)................................. 15.28 5.......................................... 15.31 lvii

Table of Statutes Housing Grants, Construction and Regeneration Act 1996 Pt II (ss 104–117)................... 19.48 s 108(1)................................. 19.48 Human Rights Act 1998......... 1.1, 2.21, 5.101, 14.5, 14.11, 19.43 I Immigration Act 2016 Sch 4 para 14............................... 9.62 15............................... 9.63 17............................... 9.64 30............................... 9.52 Income Tax Act 2007 s 336...................................... 17.21 Pt 8 Ch 2 (ss 413–430)........... 17.18 s 887(1)................................. 17.6 Income Tax (Earnings and Pensions) Act 2003 Pt 2 (ss 3–61J)........................ 16.23 Pt 3 (ss 62–226D)................... 17.39 Pt 11 (ss 682–712)................. 16.23 Income Tax (Trading and Other Income) Act 2005 s 34........................................ 17.21 321...................................... 17.3 379(1)................................. 17.6 Industrial and Provident Societies Acts 1852–1893... 1.17 Industrial and Provident Societies Acts 1893–1913... 1.18 Industrial and Provident Societies Acts 1893........ 2.27, 3.22 Industrial and Provident Societies Act 1965.............. 1.19 Inheritance and Trustees’ Powers Act 2014............................. 8.28 Inheritance Tax Act 1984 s 23........................................ 17.19 Insolvency Act 1986............ 3.34, 3.46, 3.49, 3.54, 3.60, 8.17, 8.19 Pt I (ss 1–7B).......................... 3.56 Pt II (ss 8–27)......................... 3.56 Pt III (ss 28–72H).................... 3.56 Pt IV (ss 73–219).................... 3.56 s 73........................................ 3.23 74........................................ 3.35 (2)(a)–(c)......................... 3.37 (d)............................... 3.36

Insolvency Act 1986 – contd s 74(3)................................... 3.37 85(1)................................... 3.24 89(1)................................... 3.24 90........................................ 3.24 107...................................... 8.19 122...................................... 3.25 (1)(f), (g)....................... 3.25 123...................................... 3.25 124...................................... 3.25 143(1)............................ 3.60, 8.19 144(1)................................. 8.19 201(1)–(2)........................... 3.23 205(1)–(2)........................... 3.23 ss 212, 213............................ 3.52 s 214................................. 3.52, 5.32 (2)................................. 3.52 220................................. 3.44, 347 221................................. 3.44, 347 (3), (5)........................... 3.44 226...................................... 3.44 Pt VI (ss 230–246C)................ 3.56 s 251...................................... 5.32 306...................................... 3.61 324(1)................................. 3.61 360(1), (2)........................... 5.23 Sch B1 para 3(1), (3)...................... 3.54 11(a)........................... 3.54 12(1)(a), (b), (c).......... 3.54 paras 14, 18, 19.................. 3.54 22, 29........................ 3.54 31, 35........................ 3.54 Interpretation Act 1978 s 5......................... 18.2, 18.5, 19.12 6.......................................... 2.17 Sch 1............................... 18.2, 19.12 J Judicial Trustee Act 1896............ 8.28 L Landlord and Tenant Act 1927 s 10........................................ 15.7 19(1)........................... 15.9, 15.29 (1A)................................. 15.29 Landlord and Tenant Act 1954 s 11........................................ 15.29 Pt II (ss 23–46)............... 5.57, 15.13, 15.24, 15.50 s 23(1), (2)................... 15.13, 15.15

lviii

Table of Statutes Law of Property Act 1925 – contd s 146(2), (11)......................... 15.12 Law of Property Act 1969.......... 15.19, 15.20 s 15........................................ 15.24 Sch 1...................................... 15.24 Law of Property (Miscellaneous Provisions) Act 1989 s 1.......................................... 19.41 Law Reform (Contributory Negligence) Act 1945 s 1.......................................... 13.57 Law Reform (Personal Injuries) Act 1948 s 1(3)..................................... 16.39 Leasehold Reform Housing & Urban Development Act 1993................................... 15.16 Legal Aid, Sentencing and Punish­ ment of Offenders Act 2012 s 85........................................ 18.29 Legal Deposit Libraries Act 2003 s 1.......................................... 11.11 (3)..................................... 11.11 Licensing Act 1872.................... 9.2 Licensing Acts 1902–2005......... 2.7 Licensing Act 1902.................... 1.8 s 24........................................ 2.24 (1)................................... 1.1 Licensing Act 1964......... 3.16, 5.1, 6.7, 6.47, 9.2, 9.10, 9.29, 9.33 Pt II (ss 39–58)....................... 9.1 s 39(1)................................... 9.3 40(1), (2), (3)...................... 9.3 ss 45, 46................................ 9.3 s 48........................................ 2.24 49................................... 9.33, 9.37 201(1)................................. 9.1 Sch 7 para 1................................. 5.21 2(1)............................ 6.2 (3)......... 3.16, 6.7, 6.8, 6.34 (4)............................ 6.43 3(1)............................ 4.3 (2)............................ 4.15 4................................. 5.22 (4)............................ 5.24 (5)............................ 5.25 Licensing Act 2003.............. 1.67, 2.24, 3.16, 4.14, 4.15, 4.27, 4.37, 5.22, 5.24, 5.25,

Landlord and Tenant Act 1954 – contd s 24.................... 15.15, 15.22, 15.23 (1)................................... 15.21 (b)............................... 15.22 24A...................................... 15.20 (1)................................. 15.20 25.................... 5.59, 15.15, 15.16, 15.17, 15.18, 15.19, 15.20, 15.21, 15.22 (1), (2), (6), (8)................ 15.16 26.............................. 15.15, 15.18, 15.21, 15.22 (4)......................... 15.18, 15.22 (5)................................... 15.22 (6)......................... 15.21, 15.22 27................... 15.15, 15.18, 15.23 (1), (2)............................. 15.23 29(2)................................... 15.21 29A...................................... 15.22 (3)................................. 15.22 29B...................................... 15.18 30(1), (2)............................. 15.19 31(2)................................... 15.19 32(1)................................... 15.20 33.............................. 15.15, 15.20 34(1)................................... 15.20 35........................................ 15.20 37........................................ 15.19 38(1), (4)............................. 15.24 38A...................................... 15.24 41(1)................................... 15.14 43(3)................................... 15.14 44(1)................................... 15.16 69(2)................................... 15.18 Landlord and Tenant Act 1985 s 11........................................ 15.7 12............................... 15.7, 15.29 13........................................ 15.29 Landlord and Tenant Act 1986 s 11(6)................................... 15.7 Landlord and Tenant Act 1988 s 1.......................................... 15.9 Landlord and Tenant (Coven­ ants) Act 1995.................... 15.6 s 19........................................ 15.9 Latent Damage Act 1986........... 19.42 Law of Property Act 1925 s 1.......................................... 15.3 52(2)(d)............................... 15.4 54(2)................................... 15.4 ss 141 142............................. 15.6 s 146...................................... 15.12 lix

Table of Statutes Licensing Act 2003 – contd s 64................................... 9.11, 9.66 (2)................................ 5.1, 6.31 65................................... 9.11, 9.36 (4), (5)............................. 1.6 66........................................ 9.36 67................................... 4.14, 9.34 (1), (2)............................. 9.34 68(3)................................... 9.14 69(2)................... 9.16, 9.35, 18.18 (4)................................... 9.14 71(1), (2), (4)...................... 9.14 (5)................................... 9.17 (6)................................... 9.27 (b)............................... 9.14 72........................................ 9.67 (2), (10)........................... 9.20 73........................................ 9.20 (1), (2)–(5)....................... 9.32 ss 73A, 73B............................ 9.21 s 74................................. 9.20, 11.19 76........................................ 11.20 78(2)................................... 9.23 79........................................ 9.25 80(2)................................... 9.29 81(1), (2), (3)...................... 9.30 82........................................ 9.26 (4), (6)............................. 18.22 83........................................ 9.26 84(1), (2), (3), (4)................ 9.27 85........................................ 9.67 (2)................................... 9.27 (3)................................... 9.27 (a), (b)......................... 9.27 (4)................................... 9.27 ss 86A, 86B, 86C.................... 9.27 s 87(1), (4), (5), (6)................ 9.29 88........................................ 9.67 (2), (3), (4)...................... 9.29 89........................................ 9.29 90........................................ 9.67 (1), (2)............................. 9.31 (5), (6)............................. 9.35 92A...................................... 9.28 93(1)................................... 9.27 94........................................ 9.24 (5), (6)............................. 9.24 96................................. 9.27, 18.18 (1)–(4), (7), (8)................ 9.16 97........................................ 9.35 Pt 5 (ss 98–110)..................... 9.5 s 98........................................ 9.50 99A.............. 9.54, 9.55, 9.57, 9.67

Licensing Act 2003 – contd 6.2, 6.7, 6.8, 6.22, 6.34, 6.43, 9.1, 9.10, 9.33, 11.1, 11.12, 12.2, 12.3, 12.29, 12.46, 18.15, 18.19, 18.21 s 1(1)............................... 9.6, 11.12 (2)................................. 9.8, 9.10 (b)................................. 9.33 (c)................................. 11.12 2.................................... 9.9, 11.12 (3)..................................... 9.9 (4)..................................... 9.9 (c)................................. 9.50 4(2), (3)............................... 9.4 5.................................... 9.4, 11.21 (1)..................................... 9.17 Pt 3 (ss 11–59)....................... 9.5 s 13........................................ 9.47 15(2)................................... 9.41 16(1)(c)............................... 9.37 17(3)................................... 9.38 (4)................................... 9.39 18........................................ 9.67 19........................................ 9.42 (3)................................... 9.41 19A...................................... 9.43 20........................................ 11.19 22........................................ 11.20 24(1)................................... 9.45 26........................................ 9.48 27(1)(e)............................... 9.48 28........................................ 9.48 34........................................ 9.46 35................................... 9.46, 9.67 37................................... 9.41, 9.46 38........................................ 9.41 39........................................ 9.67 44........................................ 9.67 ss 51–53................................. 9.47 s 52................................... 9.48, 9.67 53A(2)(b)............................. 9.67 53D..................................... 9.67 Pt 4 (ss 60–97)....................... 9.5 s 60(1)(a)............................... 9.10 61........................................ 9.11 62....................... 4.14, 9.11, 9.34, 9.37, 9.66 (2)...................... 4.3, 4.15, 4.27 (4)................................... 4.15 63................................... 9.11, 9.66 (2)................................... 9.12 (b)............................... 1.28 (3)................................... 9.12 lx

Table of Statutes Licensing Act 2003 – contd s 129...................................... 9.64 ss 131, 132............................ 9.64 Pt 7 (ss 136–159)......... 18.13, 18.18 ss 136–138............................. 18.18 s 136...................................... 18.20 (1)......................... 9.9, 18.13 (5)................................. 18.13 ss 137, 138............................ 18.20 s 139...................................... 18.20 (1)................................. 18.15 (1)(a)............................. 18.20 ss 140–153............................. 18.18 s 140(2)(c)............................. 18.21 141(2)(c)............................. 18.21 144(2)(c)............................. 18.21 145(3)(c)............................. 18.21 ss 146–147B....................... 9.2, 9.21 s 146(2), (4), (6).................... 18.20 147...................................... 18.21 (3)–(4)........................... 12.61 (4)(b)............................. 18.21 150...................................... 18.21 (3)(b)............................. 18.21 151(5)(b)............................. 18.21 153(4)(b)..................... 9.21, 18.21 160(1)(b)........................ 9.49, 9.61 (2)............................ 9.49, 9.61 ss 161–166............................. 9.61 s 166(1), (2)........................... 9.69 167...................................... 9.67 ss 172A–172E......................... 9.22 s 172A.................................... 9.22 172B(1), (2)......................... 9.22 ss 172C, 172D....................... 9.22 s 175...................................... 12.46 179(1), (3), (6)............... 9.49, 9.61 (7)................................. 9.35 181(2)................................. 9.68 182....................... 9.4, 9.17, 11.21 187...................................... 18.19 191...................................... 9.1 193............................... 9.15, 9.34, 9.37, 11.16 (1)................................. 9.52 Sch 1...................................... 11.12 para 1(2)............................ 11.15 (a), (b), (c)............ 11.13 (3)............................ 11.15 2(1)(a), (b), (c), (d), (e), (f), (g), (h).................... 11.13 (1A)................ 11.13, 11.17 (1B), (1C).................. 11.13

Licensing Act 2003 – contd s 100(1)–(5)........................... 9.50 (1)........................... 9.50, 9.53 (2)........................... 9.51, 9.54 (3), (4), (5), (6).............. 9.54 (7)(a), (b)....................... 9.54 100A.................................... 9.54 (1)(a), (b).................... 9.52 (2)............................... 9.52 (3)......................... 9.52, 9.54 101(1)................................. 9.53 (2)–(4)........................... 9.53 102(1)(b)............................. 9.54 (3)................................. 9.55 103(1)................................. 9.54 104(2)................................. 9.67 (3)................................. 9.56 105(2)(a)............................. 9.56 (3)........................... 9.56, 9.67 (4)................................. 9.56 (6)(b)............................. 9.55 106(2)................................. 9.57 (3)(a)............................. 9.57 (4)................................. 9.57 (6)................................. 9.55 107...................................... 9.55 (2)(b)....................... 9.50, 9.65 (3)(b)............................. 9.53 (4)........................... 9.50, 9.53 (5), (6)........................... 9.53 (8), (9), (11).................. 9.55 (12)............................... 9.53 (13)(b)........................... 9.53 108...................................... 18.18 (1)................................. 9.61 (3)................................. 9.61 109(3)(a), (b)....................... 18.18 (4)......................... 9.58, 18.18 110(1), (1A), (2).................. 9.59 Pt 6 (ss 111–135)................... 9.5 s 111(1), (2)........................... 9.62 113(3)................................. 9.63 115...................................... 9.62 117...................................... 9.63 118...................................... 9.62 120................................ 9.63, 9.67 (2), (8)........................... 9.63 123...................................... 9.64 124...................................... 9.64 (4)................................. 9.67 127...................................... 9.64 128...................................... 9.64 (6)................................. 9.64 lxi

Table of Statutes Literary and Scientific Institutions Act 1854 – contd s 25........................................ 4.31 26........................................ 18.16 27................................... 2.34, 3.13 29......................... 3.29, 3.41, 8.23 30........................................ 8.23 31........................................ 4.31 32................................... 2.34, 5.21 33.......................... 1.64, 2.34, 5.54 Live Music Act 2012........... 11.1, 11.12 s 2.......................................... 11.13 (2), (4)............................... 11.15 (8)..................................... 11.14 (9), (10), (12), (13, (15)..... 11.16 3(2)..................................... 11.16 12........................................ 11.12 Local Democracy, Economic Development and Con­ struc­tion Act 2009.............. 19.48 Local Government Finance Act 1988........................ 17.51, 17.52 s 6.......................................... 15.7 41(1)................................... 17.49 43........................................ 15.7 (1)–(2)............................. 17.43 (5)................................... 17.52 (6)(a), (b)......................... 17.52 47(2)(a), (ba)....................... 17.54 (3), (4)............................. 17.53 51........................................ 17.52 64........................................ 17.44 66(1)(a)............................... 17.43 Sch 5 paras 16, 20, 21.................. 17.52 Sch 6 para 2(1)............................ 17.48 Lotteries and Amusements Act 1976 s 3................................. 12.14, 12.45 15........................................ 12.14

Licensing Act 2003 – contd Sch 1 – contd para 2(2)............................ 11.13 4................................. 11.14 Pt 2 (paras 5–12E)............... 11.16 paras 5, 6, 7, 8.................... 11.16 para 10............................... 11.16 (3).......................... 11.16 paras 11, 12........................ 11.16 para 14(1), (2).................... 11.13 15............................... 11.13 16(1), (2).................... 11.13 17............................... 11.13 18............................... 11.13 Sch 4...................................... 9.63 Sch 5 Pt 1 (paras 1–9).................. 9.67 paras 1, 2, 4, 5, 6, 8, 8A... 9.67 para 9(1), (2)................... 9.68 Pt 2 (paras 10–15).............. 9.67 paras 10, 11, 12, 13, 14.. 9.67 para 15(1), (2)................. 9.68 Pt 3 (paras 16–18).............. 9.67 para 16(1), (2), (3).......... 9.67 (4), (5)................. 9.68 17(1), (4)................. 9.67 (6), (7)................. 9.68 18............................ 9.67 (3), (5)................. 9.68 Sch 6...................................... 9.1 Sch 7...................................... 9.1 Limitation Act 1980................... 19.40 ss 2, 4, 4A, 5, 5A.................... 19.41 s 6................................. 16.43, 19.41 8.......................................... 19.41 11........................................ 19.41 11A(4)–(7)........................... 19.41 ss 14A, 14B............................ 19.42 15, 19................................ 19.41 28, 28A.............................. 19.42 s 32........................................ 19.41 (1)................................... 19.42 (a), (b)......................... 19.42 ss 32A, 33.............................. 19.42 Limitation Amendment Act 1980................................... 19.40 Literary and Scientific Institutions Act 1854............... 2.6, 2.16, 13.2, 13.21, 13.67 s 19.......................... 5.54, 8.30, 15.5 20........................................ 5.19 21............................... 19.12, 19.32 24........................................ 2.34

M Minors’ Contracts Act 1987 s 3.......................................... 4.13 N National Heritage Acts 1980– 2002................................... 1.66 National Insurance Contribu­ tions and Statutory Pay­ ments Act 2004.................. 16.23 lxii

Table of Statutes National Minimum Wage Act 1998 s 10........................................ 16.15 O Occupiers’ Liability Act 1957..... 5.64, 13.48, 13.50, 13.56 s 1(1).............................. 5.64, 13.47 (2)..................................... 5.64 2.......................................... 13.47 (2)..................................... 5.64 Occupiers’ Liability Act 1984 s 1(3)..................................... 13.52 P Perpetuities and Accumulations Act 1964............................. 8.10 s 1(1)..................................... 8.10 3(1)..................................... 8.10 Perpetuities and Accumulations Act 2009............................. 8.10 s 5(1)..................................... 8.10 Police Reform and Social Respon­ sibility Act 2011.................. 9.52 s 106...................................... 9.47 107...................................... 9.35 108(2)................................. 9.29 113................................ 9.58, 9.59 (5)................................. 9.59 ss 114–115............................. 9.50 s 114............... 9.54, 9.55, 9.57, 9.65 (3)(b)............................. 9.54 (10)(a)........................... 9.53 115...................................... 9.54 119...................................... 9.22 120...................................... 9.28 Policing and Crime Act 2009 Sch 4 para 2................................. 9.43 paras 3, 4............................ 9.21 Policing and Crime Act 2017..... 9.4 s 135...................................... 9.1 137...................................... 9.67 140...................................... 11.21 Powers of Criminal Courts (Sen­ tencing) Act 2000 s 3.......................................... 18.11 Protection from Eviction Act 1977......................... 15.49, 18.28 s 1.......................................... 18.28 (2), (3), (5)........................ 15.49

Protection from Eviction Act 1977 – contd s 3(1)..................................... 15.49 Protection of Freedoms Act 2012................................... 5.69 Protection of Military Remains Act 1986............................. 1.66 Protection of Wrecks Act 1973... 1.66 R Race Relations Act 1976............. 16.60 s 25........................................ 4.19 Rating and Valuation Act 1961... 17.52 Rating (Valuation) Act 1999....... 17.48 Regulatory Enforcement and Sanctions Act 2008............. 18.32 s 37(1)................................... 18.32 (2)................................... 18.33 38(1)................................... 18.33 41........................................ 18.33 42(1)................................... 18.32 (2)................................... 18.33 (3)................................... 18.32 (6)................................... 18.33 54........................................ 18.33 Sch 5...................................... 18.32 Sch 6...................................... 18.33 Rent Act 1977.................. 15.25, 15.26, 15.49, 18.28 s 2.......................................... 15.28 (1)..................................... 15.26 57(5)................................... 18.28 81(4)................................... 18.28 92(2)................................... 18.28 94(5)................................... 18.28 95(2)–(3)............................. 18.28 98(1)................................... 15.26 119(2)................................. 18.28 120(2)................................. 18.28 122(2)................................. 18.28 124(1)................................. 18.28 Representation of the People Act 1983 Sch 1 para 49............................... 5.16 S Safeguarding Vulnerable Groups Act 2006............................. 5.69 Sale of Food and Drugs Act 1875................................... 10.3

lxiii

Table of Statutes Salmon and Freshwater Fisheries Act 1975............................. 18.35 Senior Courts Act 1981.............. 19.1 s 31(2)................................... 14.14 (3)................................... 14.9 (4)................................... 14.14 37........................................ 7.26 Serious Crime Act 2007............. 18.35 s 1.......................................... 18.35 25(1)................................... 18.35 30(2)................................... 18.35 32(1), (2), (6), (7)................ 18.35 Sch 1...................................... 18.35 Sex Discrimination Act 1975...... 16.60 s 13........................................ 14.15 Shop Clubs Act 1902................. 1.6 s 2(b)..................................... 1.1 Small Business, Enterprise and Employment Act 2015 Pt 8 (ss 92–103)..................... 1.39 s 92........................................ 1.39 Social Security Act 1985 s 18(2)................................... 16.17 Social Security Administration Act 1992 s 14........................................ 16.17 (3)................................... 16.17 15........................................ 16.19 Social Security Contributions and Benefits Act 1992......... 16.24 ss 151–152............................. 16.17 s 164(1)–(20.......................... 16.18 165...................................... 16.19 166...................................... 16.19 ss 171ZU–171ZZ5......... 16.20, 16.29 Sch 11.................................... 16.17 Statute of Marlbridge 1267........ 15.7 Statute of Uses 1601.................. 1.44 Supreme Court Act 1981........... 19.1 T Taxation of Chargeable Gains Act 1992 ss 135–139............................. 17.22 136, 138............................ 17.22 s 139(5)................................. 17.22 ss 152–158............................. 17.15 s 158(1)................................. 17.15 Taxes Management Act 1970 s 59D..................................... 17.17 108(1)–(3)(a)....................... 5.9 (b)....................... 5.12

Taxes Management Act 1970 – contd s 108(2)............................. 5.9, 5.12 Theft Act 1968........................... 18.35 s 17........................................ 18.31 Trade Description Act 1968....... 18.15 Trade Union and Labour Rela­tions (Consolidation) Act 1992 s 10........................................ 1.6 146...................................... 16.34 168...................................... 16.32 170...................................... 16.32 188...................................... 16.56 207A.................................... 16.55 Treasure Act 1996...................... 1.66 Trustee Act 1925................... 8.28, 8.29 s 14(2)(a)............................... 8.28 30........................................ 8.30 34........................................ 8.26 (2)(a).......................... 8.26, 8.28 36........................................ 8.28 Trustee Act 2000................... 8.28, 8.29 s 3.......................................... 8.29 6(1)(a), (b)........................... 8.29 8(3)..................................... 8.29 9(1)..................................... 8.29 11........................................ 8.29 ss 16, 17................................ 8.29 32, 34................................ 8.29 Sch 1 para 7................................. 8.29 Trustee Delegation Act 1999...... 8.28 Trusts (Capital and Income) Act 2013................................... 8.28 Trusts of Land and Appointment of Trustees Act 1996........... 8.28 Sch 3 para 3(9)............................ 8.26 U Unfair Contract Terms Act 1977.. 13.19 s 1(3)(a)................................. 13.19 (b)................................. 13.58 2(1), (2)............................... 13.58 3.......................................... 13.19 (1)..................................... 13.19 (2)..................................... 13.58 11........................................ 13.19 (4).......................... 13.19, 13.58 V Value Added Tax Act 1994 s 4(1)..................................... 17.25

lxiv

Table of Statutes Value Added Tax Act 1994 – contd Sch 9 – contd Group 13............................ 17.35 item 2............................. 17.36 notes (1), (2)................... 17.35 Sch 10........................... 17.31, 17.38 Sch 11.................................... 17.26 para 6(1), (3)...................... 17.26 Variation of Trusts Act 1958....... 8.28 Video Recordings Act 1984 s 4.......................................... 11.19 Violent Crime Reduction Act 2006 s 22........................................ 9.67

Value Added Tax Act 1994 – contd s 24.................... 17.28, 17.31, 17.38 30............................... 17.29, 17.40 46........................................ 17.26 83........................................ 17.29 94(2).......................... 17.24, 17.33 (a)............................... 17.27 Sch 1 para 1(1)............................ 17.27 paras 3, 4............................ 17.27 para 9................................. 17.28 13............................... 17.27 Sch 4 para 5(4)............................ 17.39 Sch 7A................................... 17.31 Sch 8...................................... 17.31 Group 5.............................. 17.40 Sch 9............................. 17.27, 17.31 Group 9.............................. 17.33 item 1............................. 17.36 Group 10 item 1............................. 17.36 Group 12............................ 17.36 items 1, 2........................ 17.36

W Wages Act 1986........................ 1.6 Water Resources Act 1991......... 18.4, 18.5, 18.6 s 85........................................ 18.7 (1)................................... 18.8 Weights and Measures Act 1985:. 18.15 Wildlife and Countryside Act 1981................................... 18.25

lxv

Table of Statutory Instruments

[All references are to paragraph numbers.]

Civil

A Assured Tenancies (Amendment) (England) Order 2010, SI 2010/908 art 3(2).................................. 15.34 C Categories of Gaming Machine Regulations 2007, SI  2007/ 2158................................... 12.20 reg 6(4)........................ 12.23, 12.25 Charitable Incorporated Organi­ sa­tions (Consequential Amend­ ments) Order 2012, SI 2012/3014 art 1....................................... 3.57 Charitable Incorporated Organi­ sa­tions (General) Regulations 2012, SI 2012/3012............. 2.39 regs 4, 5, 6............................. 3.56 Pt 3 (regs 13–18)................... 3.56 Charitable Incorporated Organi­ sa­ tions (Insolvency and Dissolution) Regulations 2012, SI 2012/3013 reg 3...................................... 3.56 5...................................... 3.27 6(1)(a)............................. 3.27 18.................................... 3.27 Sch 1...................................... 3.56 Children and Young Persons (Protection from Tobacco etc) Order 2007, SI 2007/ 767..................................... 12.61 Civil Procedure (Modification of the Supreme Courts Act 1981) Order 2004, SI 2004/ 1033 art 3....................................... 14.14 Civil Procedure Rules 1998, SI 1998/3132...................... 19.1

lxvii

Procedure Rules 1998, SI 1998/3132 – contd r 1.1(1), (2)............................ 19.1 1.3....................................... 19.1 3.1(2)(a).................... 14.13, 19.20 (m)............................. 19.50 3.10..................................... 19.5 Pt 6.............................. 19.5, 19.23 r 6.3(2).................................. 19.15 6.4(1)–(2)............................ 19.5 6.5(1).................................. 19.5 (2).................................. 19.15 (3).................................. 19.14 (b).............................. 19.15 6.6....................................... 19.15 6.7(1)(b).............................. 19.5 6.9............................. 19.13, 19.14 (2).................................. 19.15 6.17(2)(a)............................ 19.5 PD 6 paras 6.1, 6.2............ 19.14, 19.15 PD 6A..................................... 19.5 PD 6B..................................... 19.5 r 7.4(1)(b).............................. 19.5 (2).................................. 19.5 7.5(1).................................. 19.5 7.8....................................... 19.5 (1).................................. 19.20 PD 7A paras 2.2, 2.9...................... 19.3 PD 7B para 4.1.............................. 19.3 Pt 10...................................... 19.23 r 10.2..................................... 19.23 PD 10 para 5.2.............................. 19.24 r 15.4(1)(a), (b)...................... 19.20 r 15.5(1), (2).......................... 19.20 16.3..................................... 19.21 16.5(1), (6), (7).................... 19.21 16.6..................................... 19.21 PD 16 para 3.1.............................. 19.5

Table of Statutory Instruments Civil

Procedure Rules 1998, SI 1998/3132 – contd PD 16 – contd para 13.1............................ 19.21 r 19.6.............................. 19.8, 19.25 (1)......................... 19.8, 19.9 (2)......................... 19.9, 19.27 (3)................................ 19.27 (4)......................... 19.9, 19.28 (a), (b)...................... 19.10 19.7A(1), (2)........................ 19.11 20.4(2)(a), (b)...................... 19.21 26.6(1)(a)(i), (ii)................... 19.3 (2)................................ 19.3 (4)(b)(i)......................... 19.3 (5)(a)............................ 19.3 (6)................................ 19.3 26.8(1)................................ 19.3 PD 29 para 2.2.............................. 19.3 r 31.17................................... 19.10 50(3)................................... 19.1 PD 51O.................................. 19.6 PD 51R para 2................................. 19.6 PD 51S para 2................................. 19.6 rr 53.1–53.3........................... 13.61 r 54.5(1)................................ 14.13 PD 54A, para 5.6.................... 14.13 Pt 62...................................... 19.45 Sch 1 Pt 115................................. 19.1 PD – Pre-action Conduct and Protocols paras 1, 3, 8........................ 19.4 para 18............................... 19.4 Collective Management of Copyright (EU Directive) Regulations 2016, SI 2016/ 221................................ 11.2, 11.7 Communications (Television Licensing) Regulations 2004, SI 2004/692 Sch 1...................................... 11.23 Communications (Television Licens­ing) (Amendment) Reg­ u­lations 2016, SI 2016/704 reg 9(1).................................. 11.23 Communications (Television Licensing) (Amendment) Reg­ u­lations 2019, SI 2019/151 reg 3(4).................................. 11.23

Community Amateur Sports Clubs Regulations 2015, SI 2015/725........................ 1.47 reg 3(a), (b)........................... 1.49 4...................................... 1.55 regs 10–14............................. 1.54 11–13............................. 1.53 15–19............................. 1.56 Community Benefit Societies (Restriction on Use of Assets) Regulations 2006, SI 2006/264........................ 1.42 reg 2...................................... 1.20 4...................................... 1.20 Sch 1...................................... 1.20 Community Interest Company Regulations 2005, SI 2005/ 1788................... 1.37, 3.55, 17.11 Pt 3 (regs 7–10)..................... 3.38 reg 13.................................... 2.38 Community Interest Company (Amendment) Regulations 2014, SI 2014/2483...... 2.37, 2.38 Companies Act 2006 (Amend­ ment) (Accounts and Reports) Regulations 2008, SI 2008/393 reg 6(2).................................. 1.36 Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, SI 2013/1970...................... 5.37 Companies (Model Articles) Regulations 2008, SI 2008/ 3229................... 1.32, 2.37, 5.34, 6.30, 6.40 art 2......................... 1.30, 3.36, 3.37 3....................................... 5.32 4....................................... 5.34 5....................................... 5.36 13(1)................................ 6.47 21..................................... 1.31 22(1), (2).......................... 1.31 24..................................... 6.34 25..................................... 6.26 27..................................... 6.28 (1)................................ 6.35 28..................................... 6.38 30(1)(a), (b)...................... 6.40 33..................................... 6.30 38..................................... 6.34 39..................................... 6.26 41..................................... 6.28

lxviii

Table of Statutory Instruments Companies (Model Articles) Regulations 2008, SI 2008/ 3229 – contd art 41(1)................................ 6.35 art 42..................................... 6.38 44(1)(a), (b)...................... 6.40 47..................................... 6.30 Companies, Partnerships and Groups (Accounts and Records) Regulations 2015, SI 2015/980........................ 5.37 reg 4(3)(a), (b)....................... 1.34 Companies (Tables A to F) Regu­ lations 1985, SI 1985/805... 6.57 reg 36.................................... 6.6 40............................... 6.33, 6.34 41.................................... 6.35 regs 42, 43............................. 6.26 reg 45.................................... 6.28 46............................... 6.38, 6.40 50.................................... 6.47 70.................................... 5.32 Companies (Tables A to F) (Amend­ment) (No 2) Regu­­ lations 2007 SI 2007/2826 art 3....................................... 6.47 Copyright and Duration of Rights in Performances Regu­lations 2013, SI 2013/1782............ 11.2 Copyright and Duration of Rights in Performances (Amend­ment) Regulations 2014, SI 2014/434.............. 11.2 Copyright and Duration of Rights in Performances (Dis­ ability) Regulations 2014, SI 2014/1384...................... 11.2 Copyright and Related Rights (Marrakesh Treaty etc) (Amendment) Regulations 2018, SI 2018/995.............. 11.2 Copyright and Related Rights Regulations 2003, SI 2003/ 2498................................... 11.2 Copyright and Rights in Per­for­ mances (Certain Per­ mitted Uses of Orphan Works) Regulations 2014, SI 2014/ 2861................................... 11.2 Copyright and Rights in Per­ formances (Extended Col­lec­ tive Licensing) Regulations 2014, SI 2014/2588............. 11.2

Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014, SI 2014/2863............ 11.2 Copyright and Rights in Per­ formances (Personal Copies for Private Use) Regulations 2014................................... 11.2 Copyright and Rights in Perfor­ mances (Quotation and Parody) Regulations 2014, SI 2014/2356...................... 11.2 Copyright, Designs and Patents Act 1988 (Amendment) Regu­­lations 2010, SI 2010/ 2694................................... 11.2 reg 3(1).................................. 11.6 Copyright (Free Public Showing or Playing) (Amendment) Regulations 2016, SI 2016/ 565............................... 11.2, 11.6 Copyright (Public Adminis­ tra­ tion) Regulations 2014, SI 2014/1385......................... 11.2 Copyright (Regulation of Rele­ vant Licensing Bodies) Regu­lations 2014, SI 2014/ 898...................................... 11.2 Copyright Tribunal Rules 2010, SII 2010/791....................... 11.2 Courts Act 2003 (Consequential Provisions) Order 2005, SI 2005/886........................ 9.68

D Data Protection Act 2018 (Com­ mencement No 1 and Transitional and Saving Pro­ visions) Regulations 2018, SI 2018/625 reg 2...................................... 5.82 Data Protection (Charges and Information) Regulations 2018, SI 2018/480 reg 2...................................... 5.95 3(a).................................. 5.95 Sch 1 para 2................................. 5.95 Disability Discrimination (Pre­ mises) Regulations 2006, SI 2006/887........................... 15.45

lxix

Table of Statutory Instruments Disability Discrimination (Private Clubs etc) Regulations 2005, SI 2005/3258 regs 7, 8................................. 4.19

F Financial Services and Markets Act 2000 (Mutual Societies) Order 2001, SI 2001/2617 art 13..................................... 3.21 Financial Services and Markets Act 2000 (Regulated Activi­ ties) Order 2001, SI 2001/ 544 art 60F(2)............................... 4.30 Financial Services and Markets Act 2000 (Regulated Activi­ ties) (Amendment) (No 2) Order 2013, SI 2013/1881 art 6....................................... 4.30 20..................................... 5.46 60C(3).............................. 5.46 Fixed-term Employees (Preven­ tion of Less Favourable Treat­ ment) Regulations 2002, SI 2002/2034...................... 16.12 reg 8...................................... 16.13 Food Hygiene (Wales) Regula­ tions 2006, SI 2006/31 (W5)............................ 10.5, 10.17 Food Information Regulations 2014, SI 2014/1855............ 10.28 Food Information (Amendment) (England) Regulations 2019, SI 2019/1218...................... 10.28 Food Information (Amendment) (England) Regulations 2020, SI 2020/541........................ 10.28 Food Safety Act 1990 (Amend­ ment) Regulations 2004, SI 2004/2990......................... 10.5 Food Safety and Hygiene (Eng­ land) Regulations 2013, SI 2013/2996................. 10.5, 10.17 reg 6...................................... 10.18 7...................................... 10.20 8...................................... 10.22 11.................................... 18.24 12.................................... 18.25 16.................................... 10.23 19(1), (2)......................... 18.23 22.................................... 10.19 23(a)................................ 10.19 (b)................................ 10.21 Food Safety and Hygiene (Eng­ land) (Amendment) Regula­ tions 2014, SI 2014/2885... 10.5

E Employers’ Health and Safety Policy Statements (Excep­ tion) Regulations 1975, SI 1975/1584......................... 16.38 Employers’ Liability (Compulsory Insurance) Regulations 1998, SI 1998/2573...................... 16.41 Employment Equality (Age) Regulations 2006, SI 2006/ 1031................................... 16.60 Employment Equality (Religion or Belief) Regulations 2003, SI 2003/1660...................... 16.60 Employment Equality (Sexual Orientation) Regulations 2003, SI 2003/1661............ 16.60 Employment Rights (Increase of Limits) Order 2020, SI 2020/ 250........................... 16.54, 16.57 Employment Tribunals (Early Conciliation: Exemption and Rules of Procedure) Regula­ tions 2014, SI 2014/254..... 16.13, 16.33, 16.53, 16.70 Employment Tribunals’ Exten­ sion of Jurisdiction (England and Wales) Order 1994, SI 1994/1623......................... 16.43 Equality Act 2010 (Age Excep­ tions) Order 2012, SI 2012/ 2466 art 8................................. 4.23, 5.74 Equality Act 2010 (Disability) Regulations 2010, SI 2010/ 2128 reg 15(2)(viii)......................... 15.45 Equality Act 2010 (Guidance on the Definition of Disability) Appointed Day Order 2011, SI 2011/1159...................... 16.69 Equality Act (Sexual Orientation) Regulations 2007, SI 2007/ 1263 reg 16.................................... 4.19 lxx

Table of Statutory Instruments G

H

Gambling Act 2005 (Club Gaming and Club Machine Permits) Regulations 2007, SI 2007/1834...................... 12.28 reg 8(1), (20.......................... 12.35 regs 12, 13, 14....................... 12.35 Gambling Act 2005 (Club Gam­ing and Club Machine Permits) (Amendment) Regula­tions 2007, SI 2007/2689.............. 12.28 Gambling Act 2005 (Club Gam­ ing Permits) (Authorised Gaming) Regulations 2007, SI 2007/1945 reg 2(2).................................. 12.25 3(2), (3)........................... 12.26 Gambling Act 2005 (Exempt Gaming in Clubs) Regula­ tions 2007, SI 2007/ 1944................................... 12.25 regs 2, 3, 4............................. 12.10 Gambling Act 2005 (Gaming in Clubs) Regulations 2007, SI 2007/1942...................... 12.9 reg.2................................. 12.3, 12.9 Gambling Act 2005 (Incidental Non-Commercial Lotteries) Regulations 2016, SI 2016/ 239 reg 2(2), (3)........................... 12.45 Gambling Act 2005 (Inspection) (Provision of Information) Regulations 2007, SI 2007/ 319........................... 12.36, 12.59 Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009, SI 2009/1272 reg 2(1)(a), (b)....................... 12.13 (2).................................. 12.13 3(1)(a), (b)....................... 12.13 (2)(a), (b)....................... 12.13 Gambling Act 2005 (NonCommercial Equal-Chance Gaming) Regulations 2007, SI 2007/2041 reg 3(2), (3), (4), (5), (6)........ 12.16 General Food Hygiene (Amend­ ment) (EU Exit) Regulations 2019, SI 2019/642.............. 10.5 General Food Regulations 2004, SI 2004/3279...................... 10.5

Health and Safety (Display Screen Equipment) Regulations 1992, SI 1992/2792............ 16.39 Health and Safety Information for Employees Regulations 1989, SI 1989/682.............. 16.38 Health Protection (Coronavirus, Business Closure) (England) Regulations 2020, SI 2020/ 327................................. 9.7, 10.2 Health Protection (Coronavirus, Restrictions) (No 2) (Eng­ land) Regulations 2020, SI 2020/684........................... 9.7 High Court and County Courts Jurisdiction Order 1991, SI 1991/724 art 5(2).................................. 19.3 Housing (Tenancy Deposit) (Prescribed Information) Order 2007, SI 2007/797.... 15.38 I Industrial and Provident Socie­ ties and Credit Unions (Arrangements, Re­con­struc­ tions and Administration) Order 2014, SI 2014/229.... 3.49, 3.51, 3.54 Insolvency Proceedings (Monetary Limits) (Amendment) Order 2004, SI 2004/547............... 5.23 L Landlord and Tenant Act 1954, Part II (Notices) Regulations 2004, SI 2004/1005 Forms 1, 2.............................. 15.16 Form 3................................... 15.22 Legislative Reform (Exempt Lotteries) Order 2016, SI 2016/124........................... 12.44 art 1(1).................................. 12.45 2(f)................................... 12.45 3(a), (d)............................ 12.48 Legislative Reform (Minor Varia­ tions to Premises Licences and Club Premises Certificates) Order 2009, SI 2009/1772..... 9.27, 9.46

lxxi

Table of Statutory Instruments Licensing Act 2003 (Descriptions of Entertainment) (Amend­ ment) Order 2013, SI 2013/ 1578................................... 11.13 art 2(2).................................. 11.13 (3)......................... 11.13, 11.17 3....................................... 11.13 4....................................... 11.13 Licensing Act 2003 (Fees) Regulations 2005, SI 2005/ 79................................. 9.14, 9.70 Sch 3...................................... 9.70 Licensing Act 2003 (Fees) (Amendments) Regulations 2005, SI 2005/357.............. 9.70 Licensing Act 2003 (Forms) (Amendment) Regulations 2013, SI 2013/432.............. 9.14 Licensing Act 2003 (Gambling and Licensing Forms) Regulations 2010, SI 2010/ 2440................................... 9.14 Licensing Act 2003 (Hearings) Regulations 2005, SI 2005/ 44....................................... 9.14 Licensing Act 2003 (Licensing Authority’s Register) (Other Information) Regulations 2005, SI 2005/43................ 9.14 Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010, SI 2010/860....... 9.14, 9.21, 9.32, 9.43, 18.21 art 3....................................... 9.43 Sch......................................... 9.43 para 1(1)............................ 9.21 2................................. 9.21 3............................ 9.21, 9.32 4................................. 9.21 Licensing Act 2003 (Mandatory Licensing Conditions) (Amendment) Order 2014, SI 2014/2440.................. 9.2, 9.31 art 3(2)–(3)............................ 9.32 Sch 1 para 1................................. 9.21 (2)............................ 9.21 (e)........................ 9.21 paras 2, 3............................ 9.21 Licensing Act 2003 (Mis­ cel­ laneous Amendments) Regu­lations 2017, SI 2017/ 411............................... 9.17, 9.46

Licensing Act 2003 (Persistent Selling of Alcohol to Children) (Prescribed Form of Closure Notice) Regulations 2012, SI 2012/963............................ 9.14 Licensing Act 2003 (Personal Licences) Regulations 2005, SI 2005/41 reg 4...................................... 9.63 Licensing Act 2003 (Personal Licences: Relevant Offences) (Amendment) Order 2005, SI 2005/2366...................... 9.63 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, SI 2005/42................ 9.14 Pts 2–4 (regs 3–29)................ 9.38 regs 9, 10............................... 9.38 12, 13, 13A..................... 9.46 reg 16A.................................. 9.47 Pt 3 (regs 17–20)................... 9.14 regs 17, 18............................. 9.14 reg 20..................... 9.27, 9.29, 9.47 Pt 4 (regs 21–29)................... 9.14 regs 21–21B........................... 9.38 21A–21B......................... 9.14 reg 22............................... 9.19, 9.40 23............................... 9.14, 9.15 regs 25–26C........................... 9.14 25, 26............................. 9.38 27, 27A, 28................ 9.14, 9.38 reg 29............................... 9.29, 9.47 regs 33, 34............................. 9.45 35, 36............................. 9.23 reg 36A.................................. 9.47 39A.................................. 9.47 Sch 1...................................... 9.38 Sch 2................................. 9.38, 9.39 Sch 4...................................... 9.46 Sch 4A................................... 9.46 Sch 5...................................... 9.46 Sch 8....................... 9.27, 9.29, 9.47 Sch 8A................................... 9.47 Sch 9 Pt A..................................... 9.14 Pt B..................................... 9.14 Pt 2................................. 9.17 Sch 12 Pt A..................................... 9.45 Pt B..................................... 9.45 Sch 13 Pt A..................................... 9.23

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Table of Statutory Instruments Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, SI 2005/42 – contd Sch 13 – contd Pt B..................................... 9.23 Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Amendment) Regulations 2012, SI 2012/ 955..................................... 9.14 reg 4................................ 9.19, 9.40 Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Amendment) Regulations 2018, SI 2018/ 232..................................... 9.14 Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Amendment) (Electronic Applications) Regulations 2009, SI 2009/ 3159................................... 9.14 Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Miscellaneous Amendments) Regulations 2009, SI 2009/1809..... 9.14, 9.27, 9.46, 9.70 Licensing Act 2003 (Premises Licenses and Permitted Tem­ porary Activities) (Forms and Notices) (Amend­ ment) Regulations 2010, SI 2010/2851.......................... 9.14 Licensing Act 2003 (Summary Review of Premises Licences) Regulations 2007, SI 2007/2502).................... 9.47 Local Government Finance (Mis­ cellaneous Amendments and Repeal) Order 1990, SI 1990/1285.......................... 15.19 M Management of Health and Safety at Work Regulations 1999, SI 1999/3242............ 16.39 Manual Handling Operations Regulations 1992, SI 1992/ 2793 reg 4...................................... 16.39

Maternity and Parental Leave Regulations 1999, SI 1999/ 3312 reg 4...................................... 16.26 regs 5–7................................. 16.28 reg 6...................................... 16.26 11(1)................................ 16.26 regs 13–20............................. 16.31 reg 18(2)................................ 16.28 18A........................ 16.27, 16.28 19.................................... 16.33 N National Minimum Wage Regulations 2015, SI 2015/ 621..................................... 16.15 National Minimum Wage (Amend­ment) Regulations 2020, SI 2020/338.............. 16.15 Non-Domestic Rating (Alteration of Lists and Appeals) (Eng­ land) Regulations 2009, SI 2009/2268 reg 4(1).................................. 17.49 5(1).................................. 17.49 6(1).................................. 17.49 20.................................... 17.49 21.................................... 17.49 Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendments) Regulations 2017, SI 2017/ 155..................................... 17.49 Non-Domestic Rating (Altera­ tion of Lists, Appeals and Procedure) (England) (Amend­ment) Regulations 2018, SI 2018/911.............. 17.49 Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2005, SI 2005/758........................ 17.49 Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989, SI 1989/1058 reg 11(1)................................ 17.54 12(1)................................ 17.54 14(1)................................ 17.54 Non-Domestic Rating (Deferred Payments) (England) Regu­ lations 2009, SI 2009/1597:. 17.54

lxxiii

Table of Statutory Instruments Non-Domestic Rating (Deferred Payments) (Wales) Regu­ lations 2009, SI 2009/2154. 17.54 Non-Domestic Rating (Definition of Domestic Property) Order 2010, SI 2010/682.... 17.43 Non-Domestic Rating (Dis­ cretionary Relief) Regu­ la­ tions 1989, SI 1989/1059... 17.51 Non-Domestic Rating (Reliefs, Thresholds, and Amend­ ment) (England) Order 2017, SI 2017/102............... 17.52 Non-Domestic Rating (Small Busi­ ness Rate Relief) (Eng­ land) Order 2004, SI 2004/ 3315................................... 17.52 P Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, SI 2000/ 1551................................... 16.11 reg 7...................................... 16.13 Paternity and Adoption Leave Regulations 2002, SI 2002/ 2788................................... 16.30 reg 28.................................... 16.33 Perpetuities and Accumulations Act 2009 (Commencement) Order 2010, SI 2010/37...... 8.10 Personal Protective Equipment at Work Regulations 1992, SI 1992/2966...................... 16.39 Provision and Use of Work Equip­ ment Regulations 1998, SI 1998/2306 regs 4, 5, 9............................. 16.39 reg 11.................................... 16.39 21.................................... 16.39 R Regulatory Reform (Business Tenancies) (England and Wales) Order 2003, SI 2003/ 3096......................... 15.13, 15.19 art 1....................................... 15.20 2............................. 15.16, 15.21 4....................................... 15.16 5....................................... 15.21 18..................................... 15.20

Regulatory Reform (Business Tenancies) (England and Wales) Order 2003, SI 2003/ 3096 – contd art 22(1)................................ 15.24 Sch 2...................................... 15.24 Relief for Community Amateur Sports Clubs (Designation) Order 2002, SI 2002/1966.. 1.48 Rules of the Supreme Court Ord 15 r 12(5)................................ 19.28

S Safeguarding Vulnerable Groups Act 2006 (Miscellaneous Pro­visions) Regulations 2012, SI 2012/2112............ 5.69 Scheme for Construction Con­ tracts (England and Wales) Regulations 1998, SI 1998/ 649 Sch......................................... 19.48 paras 2, 11, 22.................... 19.48 Scheme for Construction Con­ tracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011, SI 2011/­ 2333................................... 19.48 Small Companies (Micro-Entities Accounts) Regulations 2013, SI 2013/3008...................... 5.37 reg 4...................................... 1.35 Small Society Lotteries (Registra­ tion of Non-Commercial Societies) Regulations 2007, SI 2007/2328 regs 3, 5................................. 12.53 Smoke-free (Exemptions and Vehicles) Regulations 2007, SI 2007/765 reg 4(1), (2)(f)........................ 18.30 6...................................... 11.20 Smoke-free (Premises and Enforcement) Regulations 2006, SI 2006/3368 regs 2, 3................................. 18.30 Smoke-free (Signs) Regulations 2012, SI 2012/1536 reg 3...................................... 18.30

lxxiv

Table of Statutory Instruments Statutory Maternity Pay (General) Regulations 1986, SI 1986/1960...................... 16.18, 16.24 Statutory Paternity Pay and Adoption Pay (General) Regulations 2002, SI 2002/2818......................... 16.21 Statutory Shared Parental Pay (General) Regulations 2014, SI 2014/3051...................... 16.20 Statutory Sick Pay and Statutory Maternity Pay (Decisions) Regulations 1999, SI 1999/ 776..................................... 16.17 Statutory Sick Pay (General) Regulations 1982, SI 1982/894........................... 16.17 reg 7...................................... 16.17

T Transfer of Tribunal Functions (Lands Tribunal and Miscellaneous Amend­ ments) Order 2009, SI 2009/1307......................... 15.19

U Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012, SI 2012/989........................... 16.47 V Value Added Tax Regulations 1995, SI 1995/2518 regs 7, 10............................... 17.26 13, 14............................. 17.25 reg 32.................................... 17.29 Pt XIV (regs 99–111).... 17.28, 17.39 reg 106.................................. 17.28 W Working Time Regulations 1998, SI 1998/1833 reg 13(1)................................ 16.16 13A.................................. 16.16 35.................................... 16.16 Workplace (Health, Safety and Welfare) Regulations 1992, SI 1992/3004...................... 16.39 reg 5...................................... 16.39 regs 8–12............................... 16.39

lxxv

Table of EU Materials and Other Guidance

[All references are to paragraph numbers.] EUROPEAN UNION Council of Europe’s European Sports Charter 1993............ 1.48 EC Guidance Document on EC Regulation 852/2004 para 6.1................................. 10.10 EU Directive 2012/6/EU............. 1.35 EU Directive 2014/26/EU........... 11.7 European Convention on Human Rights..................... 14.5 art 4....................................... 14.10 6............................. 14.10, 19.43 (1)................ 2.21, 5.101, 19.43 8....................... 5.84, 5.96, 14.10 arts 9, 10................................ 14.10 art 11................................ 1.1, 14.10 Food Hygiene Regulation (EC) 852/2004........................... 10.5 art 5....................................... 10.13 6(2).................................. 10.10 Annex II................................. 10.13 Ch I........................... 10.13, 10.14 Ch II.......................... 10.13, 10.15 Ch III................................... 10.13 Ch IV.................................. 10.13 Ch VIII................................ 10.16 General Data Protection Regu­ lation 2018.................. 5.82, 5.84, 5.89, 6.18 art 4(1)............................ 5.86, 5.88 (7), (8)............................ 5.91 (11)................................ 5.87 5....................................... 5.85 6(1).................................. 5.93 (b)–(d)........................ 5.87 (d).............................. 5.87 (e).............................. 5.90 (f)............................... 5.87 7....................................... 5.87 9.................................. 5.87, 5.90 10..................................... 5.90

General Data Protection Regu­ lation 2018 – contd art 12..................................... 5.93 15................................ 5.92, 5.93 23..................................... 5.90 (1)................................ 5.90 36..................................... 5.94 Ch 5 (arts 44–50)................... 5.82 Ch 6 (arts 51–59)................... 5.82 arts 57–58.............................. 5.82 art 85..................................... 5.90 (2)................................ 5.90 89..................................... 5.90 (1)................................ 5.85 99..................................... 5.82 General Food Law Regulation (EC) 178/2002............... 10.5, 10.6 art 2....................................... 10.6 3....................................... 10.7 14(4)(a)–(c)...................... 18.23 Regulation (EU) 1169/2011 on the provision of food information to consumers... 10.5, 10.28

OTHER GUIDANCE Charity Commission’s Guide...... 2.39 Charities and Litigation: a Guide for Trustees.................. 19.17 Equality and Human Rights Commission Guidance........ 5.78 Financial Conduct Authority’s Finalised Guidance 15/12.... 2.12 paras 3.28–3.31..................... 1.20 4.8, 4.10, 4.12.............. 1.6 5.2, 5.5, 5.6.................. 1.19 para 5.8................................. 1.6 paras 6.2–6.17....................... 1.19 8.66–8.77................... 3.7, 3.8

lxxvii

Table of EU Materials and Other Guidance Financial Reporting Standards FRS 102............................ 17.7, 17.8 sections 5, 6....................... 17.8 Food Law Code of Practice (England) section 3.2............................. 10.10 3.3.17........................ 10.10 Appendix 5............................ 10.10 Food Standards Agency’s Guide para 40.................................. 18.23 Gambling Commission’s Advice on Non-Commercial and Private Gaming and Betting:. 12.19 Gambling Commission’s Gam­ bling Codes of Practice....... 12.5 Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence provision 1.2....................... 12.9 1.9....................... 12.11 25.4..................... 12.9 Gambling Commission’s Guidance to Licensing Authorities Pt 25.............................. 12.5, 12.25 para 25.7............................ 12.26 HMRC Business Income Manual BIM24200.............................. 17.2 BIM24255.............................. 17.14 BIM24315.............................. 17.16 BIM24360.............................. 17.16 BIM24455.............................. 17.16 BIM41810.............................. 17.13 HMRC, Community Amateur Sports Clubs: Detailed Guidance Notes............ 1.57, 2.40, 4.18 paras 2.3.1–2.3.15................. 1.51

HMRC Company Taxation Manual CTM40105............................. 17.15 CTM40130............................. 17.3 HMRC COTAX Manual COM23110............................ 17.17 COM60040............................ 17.17 COM100020.......................... 17.17 HMRC, Excise Notice 458: Lottery Duty....................... 12.62 HMRC VAT Input Tax Manual VIT4000................................. 17.39 HMRC VAT Supply and Con­ sidera­tion Manual VATSC06000.......................... 17.31 VATSC11120.......................... 17.33 Revenue Interpretation RI 177.................................... 17.16 Valuation Office Agency Rating Manual section 4................................ 17.48 part 1 practice note 1................ 17.48 VAT Notices 700........................................ 17.39 section 21........................... 17.29 29........................... 17.31 700/22................................... 17.25 701........................................ 17.33 701/41................................... 17.37 701/45................................... 17.34 701/47................................... 17.35 706........................................ 17.32 sections 6, 11..................... 17.32 727........................................ 17.29 731........................................ 17.30 733........................................ 17.30 742........................................ 17.37

lxxviii

Dictionary definition of a club

CLUB klub, n a heavy tapering stick, knobbly or thick at one end, used to strike with; a cudgel; a bat used in certain games; an instrument for playing golf; a playing card with black trefoil pips; a combination, bunch; a clique, set; an association of persons for social, political, athletic or other ends; an association of persons who possess premises or facilities which all members may use; a clubhouse, or the premises occupied by a club; a nightclub. – vt to beat with a club; to use a heavy object as a club; to throw into confusion(military); to gather into a bunch; to combine. – vi (esp with together) to join together for some common end; to share in a common expense; to visit nightclubs. – adj clubbable or clubable; adj clubby sociable; exclusive; cliquey – club class a class of seat on an aircraft between tourist class and first class; club deal (finance) a takeover by a group of private equity companies working as a syndicate; club-face the face of a golf club; club-foot a deformed foot; club-haul (nautical) to tack, esp in an emergency; clubhouse a house for the accommodation of a club; clubland the area around St James’s in London, where many of the old-established clubs are; club-law government by violence; club-line (printing) a short line at the end of a paragraph; clubman a member of a club or clubs; a frequenter of clubs; a man-about-town; club moss any primitive mosslike plant of the order Lycopodiales; clubroom the room in which a club meets; clubroot a fungal disease which attacks the roots of plants of the genus Cruciferae; club sandwich a sandwich of three slices of bread or toast, containing two fillings – in the (pudding) club (slang) pregnant; join the club (colloquial) we are all in the same position; me too; on the club (old slang) certified unfit to work. [Old Norse and Swedish klubba; same root as clump]. Taken from The Chambers Dictionary 2013

lxxix

Part 1:

The Formation and Dissolution of a Club

1

Chapter 1

Formation of the Club

1.  The legal definition of a club 1.1 The essential criteria As may be seen from the dictionary definition of a club, set out on page lxxix, the word ‘club’ has multifarious uses in the English language. Club law, not to be confused with club-law, is a concept generally recognised in English law and it is the aim of this book to elucidate the law and practice which govern this branch of the law.1 The definition of a club for the purposes of club law needs explanation. Everyone has experience of or has heard about clubs. They come in all shapes and sizes: Arsenal Football Club, the Kennel Club, the Royal Automobile Club, the Garrick Club, the Acol Bridge Club, Haltwhistle & District Working Men’s Club, the Royal and Ancient Golf Club of St  Andrews and so on. Clubs’ terminology to describe themselves is equally variegated: a club may for example be called an alliance, an association, a brotherhood, a centre, a circle, a federation, a fellowship, a forum, a fraternity, a fund, a guild, an institute, an institution, a league, a society or a union. In its definition of a club the Chambers Dictionary talks of ‘an association of persons for social, political, athletic or other ends; an association of persons who possess premises or facilities which all members may use’. But for the purposes of club law, however, this definition needs qualification. To be recognised as a club at law we consider that it must fulfil all of the following criteria: (1) it must comprise two or more natural persons who are voluntarily bound together for an agreed and common purpose;2 (2)

1 2 3

it must exist for a lawful purpose other than simply for the purposes of trade or making a profit for its members;3

See Megarry V-C’s comment in In re GKN Bolts & Nuts Ltd Sports and Social Club [1982] 1  WLR  774, at 776, ‘As is common in club cases, there are many obscurities and uncertainties, and some difficulty in the law.’ Conservative Central Office v Burrell [1982] 1 WLR 522, CA, at 525 (a tax case). Freedom of association with others is enshrined in article 11 of the European Convention on Human Rights enacted as part of the Human Rights Act 1998. Kowloon Stock Exchange v Commissioner of Inland Revenue [1985] 1 WLR 133, PC, at 139 (where the court held that the Stock Exchange was not a club because it existed to aid the profit-making activities of its members). The acquisition of gain which is incidental to the club’s main activities is no bar to club status: Carlisle and Silloth Golf Club v Smith [1913] 3  KB  75,  CA (green fees received from non-members); Newton-le-Willows Cricket Club v Newton-le-Willows UDC [1966] RVR 120 (rental received from outside organisations for hire of the club’s recreation hall). The fact too that a proprietor of a club intends to make profit does not undermine this criterion because the members of the club have no such intention for themselves.

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1.2  Formation of the Club (3)

it must not be of a temporary nature;4

(4)

it must have a constitution or a set of rules which fairly regulates the conduct of its members towards each other;5

(5)

there must be a defined process for the admission of members;6

(6)

it must possess what can best be described as collegiality, that is, the process of making decisions or agreeing on actions shared by all the members.7

In R v RL and JF 8 Lord Justice Hughes, at [11], stated, ‘There are probably almost as many different types of unincorporated associations as there are forms of human activity’. He added that ‘a village football team, with no constitution and a casual fluctuating membership, meeting on a Saturday morning on a rented pitch’ was aptly described as an unincorporated association. However, it would not comprise an unincorporated members’ club at law since it would not fulfil the third, fourth or fifth criteria nor perhaps the sixth criterion. 1.2 Clubs, societies and associations The reader will observe that the dictionary definition of a club cited in 1.1 actually embodies the word ‘association’. The Chambers Dictionary goes on to define an association as ‘a society of persons joined to promote some object’. That the three generic words of clubs, societies and associations, are often used synonymously is amply demonstrated by the judgment of Lord  Lindley cited in 1.11 where he uses the three generic words interchangeably within his opening ten words.9 And it is a fact that the underlying legal principles are exactly the same, whatever the nomenclature, in each case provided the said criteria are fulfilled. Where confusion is often caused is in the applicability or otherwise of the second criterion. There are, for example, many trade associations which do not qualify as a ‘club’ because they exist for the purposes of trade or profit.10 The confusion is worse confounded by the loose use of the word ‘club’ in commercial circles when they are not clubs at all.11 For the sake of simplicity we have used the word ‘club’ in the text, as far as possible, to include the whole spectrum of clubs, societies and associations.

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See, for example, Licensing Act  1902, s  24(1); Shop Clubs Act  1902, s  2(b); Gaming Act 1968, ss 11(2) and 40(4)(c) and Sch 3, para 7(1); and Gambling Act 2005, ss 266(1) (c) and 267. 5 Conservative Central Office v Burrell [1982] 1 WLR 522, CA, at 525. 6 Ibid, at 525. 7 Val de Lobo (Turismo) Limitada v Chandler (unreported, 2  October 1997) per HH  Judge Peter Crawford  QC sitting as a High Court Judge in a reserved judgment. One of the authors acted as counsel in this case. The fact that a proprietor takes the leading role in a proprietary club does not undermine this criterion, provided that the club’s activities are run in a collegiate way under both the fourth and sixth criteria. 8 [2008] EWCA (Crim) 1970. 9 See also British Diabetic Association v The Diabetic Society [1995] 4 All ER 812, at 831 (Robert Walker J) (a passing off action). 10 Eg a Protection & Indemnity Club (‘P & I Club’) which provides collective self-insurance to its shipowner members; or the Midcounties Co-operative Society which is part of the Co-operative movement (‘the Co-op’) which runs retail shops; or the Grain and Feed Trade Association (‘GAFTA’) which promotes international trade in grains, animal feedstuffs, pulses and rice. Investment clubs, where the primary purpose of the club is the acquisition of gain for its members, do not fall within the scope of this book. 11 See 1.68.

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Historical introduction 1.4

2.  Historical introduction 1.3 The origin of clubs in the sense that we are using the word ‘club’ can be traced back in England to the mid-seventeenth century. In Tudor times the breaking away from the Catholic Church put Henry VIII and, more so, Elizabeth I in a vulnerable position with regard to those disaffected parties who wanted to bring England back into the fold of Catholicism. Freedom of thought and speech coupled with an association of persons was perceived as a potentially destabilising or subversive threat to the monarchy and was not tolerated. The much feared Court of Star Chamber, an early Tudor court of law which evolved into a political weapon, played a major role in suppressing personal rights and the liberty of the subject until its summary abolition by the Long Parliament in 1641 under the Stuart king, Charles I. From then on, a much more relaxed attitude prevailed towards the peaceable association of persons.12 The first coffee-house in London was introduced from Oxford in 1652 by a person known simply as Jacob the Jew, and the coffee-house rapidly took root; by 1663 there were over 80 coffee-houses in the City of London. These establishments were used by coteries in need of a regular meeting place, one such in nearby Westminster being Miles’s coffee-house which was the venue of the Rota Club founded for political debate. In the mid-1650s there met in Oxford a group of scientific virtuosi who instituted an organised club (each member paying a weekly shilling towards its expenses) which later in 1662 coalesced into the Royal Society of London for Improving Natural Knowledge, now known simply as the Royal Society. On 26 July 1660 Samuel Pepys recorded in his diary, ‘we went to Wood’s at the Pell Mell (our old house for clubbing) and there spent till ten at night’. 1.4 The eighteenth century saw a big increase in drinking and social clubs, which commonly met on a weekly basis at a tavern to eat or sing or debate, a wellknown example being the Kit-Cat Club13 of notable Whigs who used to meet at the Flask Tavern in Highgate, but many humbler clubs existed as well. At the same time, on a more intellectual level, in 1764 Dr Johnson, the celebrated lexicographer, founded in London the Literary Club, among whose members were Sir  Joshua Reynolds the artist, Edward Gibbon the historian, Oliver Goldsmith the playwright, David Garrick the actor, and Adam Smith the economist. In 1836 and 1837 Charles Dickens published in serial form his famous novel called The Posthumous Papers of the Pickwick Club which dealt with certain members’ adventures around England.14 In the nineteenth century, too, there grew up ‘the gentleman’s club’ which was so characteristic of Victorian society and which earns a mention in the Chambers Dictionary under ‘clubland’ (‘the area around St James’s in London, where many of the old-established clubs are’). Although White’s, the earliest, was established in 1693 as a chocolate-house which in the next century became a fashionable gentlemen’s club, many of these clubs such as the Athenaeum, the Travellers and the Reform, were founded in the first half of the nineteenth century and were housed in grand edifices. The club had come of age. Since mid-Victorian times,

12 Non-conformists and protestant dissenters, however, had to wait their turn until the Act of Toleration 1689, passed in the first year of the reign of William and Mary. Catholics had to wait much longer. 13 Named after a pudding-pie man called Christopher Catling, on whose premises the club had originally met. 14 The members in question were Mr Pickwick himself and Messrs Snodgrass, Tupman, and Winkle, who were obliged to report to the rest of the membership.

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1.5  Formation of the Club helped by the country’s then economic prosperity which resulted in people of all classes having more leisure time, there has been a proliferation of clubs, societies and associations of every description: artistic, literary, military, musical, occupational, political, professional, social, sporting, theatrical and university. Up and down the country they exist, practically no town in England or Wales without its fair share of clubs, involving a large segment of the population.

3.  Classification of clubs 1.5 Overview For the purposes of this book clubs may be classified either as members’ clubs or as proprietary clubs. Members’ clubs as a classification has various sub-divisions: (1)

unincorporated members’ clubs;

(2)

working men’s clubs;

(3)

community clubs;

(4)

company clubs;

(5)

charitable clubs;

(6)

community amateur sports clubs.

1.6 Many of the above clubs are regulated by or have to pay attention to various statutes when it comes to their formation and their activities. And before we discuss them, we refer to certain categories of clubs which do not fall within the scope of this book: (1)

Shop clubs These clubs were established under the Shop Clubs Act 1902. A  shop club or thrift fund is a club whereby a workman or employee connected with a workshop, factory, dock, shop or warehouse on the one hand and the employer on the other hand both make contributions to a savings club. This type of statutory club fell by the wayside because of the development of trade union law and the advent of national insurance, and the Act was repealed by the Wages Act 1986. Some few clubs may still exist.

(2)

Trade Unions A trade union is an unincorporated members’ club where the members are bound together by a contract of membership but trade unions are so specially regulated by statute as to form a separate class of their own. A trade union has quasi-corporate status and is prohibited from registering as a company under the Companies Act 2006 or as a society under the Friendly Societies Act  1974 or under the Co-operative and Community Benefit Societies Act 2014 (‘CCBSA 2014’).15

(3)

Incorporated Friendly Societies Parliament created this new form of friendly society under the Friendly Societies Act 1992 with the intention that the Friendly Societies Act 1974, whilst not repealed, would become obsolete.16 We have not dealt separately with this form of society because, like a trade

15 See Trade Union and Labour Relations (Consolidation) Act 1992, s 10. 16 Friendly Societies Act 1992, s 5 and see 1.14 for working men’s clubs under the Friendly Societies Acts.

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Classification of clubs 1.7 union, it is of a specialised nature. It undoubtedly has some characteristics of a club in that it has a membership governed by rules, and by section 10 of the 1992 Act they can include social activities which are not inconsistent with their other permitted activities. But their main activities are business activities and it is doubtful whether they satisfy the second criterion (existing for purposes other than trade or profit) or the sixth criterion (the need for collegiality). It is interesting to see, however, that by section  65(4) of the Licensing Act 2003 these societies can apply for a club premises certificate, but this is only because section 65(5) has deeming provisions in their favour, which suggests that without them the incorporated friendly society would not be a qualifying club. (4)

Credit unions These are self-help associations designed to provide their members with a source of low-cost credit. They are authorised by the Credit Unions Act  1979, as both deposit-taking organisations regulated by the Prudential Regulation Authority,17 and societies registered under CCBSA 2014 and regulated by the Financial Conduct Authority (‘FCA’). Each credit union has a ’common bond’; this may be for people living or working in the same area, or for people working for the same employer, or for people who belong to the same association such as a club, church group or trade union.18 Since these unions are regulated as financial institutions, it is not appropriate to deal with them in this book.

(5)

Co-operative societies The FCA, which is the registering authority, refers to the society as a trading entity (‘If a co-operative society is already trading’).19 A cooperative society, however, is not defined in CCBSA 2014 and so the FCA, in the tradition of the co-operative founders, considers whether any society for registration is ‘an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations’.20 If so, it says that such a society should be ‘open to all persons able to use their services and willing to accept the responsibilities of membership’.21 Therefore these societies do not fulfil the second criterion (existing for a purpose other than that of trade or making a profit for its members) nor the fifth criterion (a defined process for the admission of members).22

1.7 The decision to form a club In the paragraphs below and Table 1 at the end of this chapter the different characteristics of each club structure are set out. The choice is an important one to get right since it will have legal and financial consequences. Accordingly, what follows is an outline of the essential differences between the various types of club.

17 Credit Unions Act 1979, s 1(1)(d). 18 Ibid, s 1 as amended. 19 Financial Conduct Authority’s Finalised Guidance 15/12, published on 30 November 2015, para 4.8. 20 Ibid, para 4.10. 21 Ibid, para 4.12. 22 The Financial Conduct Authority does not regard a co-operative society as meeting the requirements for registration as a community benefit society: see the Finalised Guidance, para 5.8.

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1.8  Formation of the Club

4.  Unincorporated members’ clubs 1.8 By far the most common type of club is the unincorporated members’ club. Their number is untold. Its undoubted popularity is because it is the easiest, cheapest and the most informal way of forming a club. Added to which is the twofold advantage, admittedly shared by all members’ clubs: (1) the use of the concept of the trust whereby trustee members can hold and manage the club property and assets on behalf of all the members; and (2) the favourable treatment which such clubs have received since 1902 under the Licensing Acts.23 Many historic clubs such as the Jockey Club (founded 1750), the Royal and Ancient Golf Club of  St  Andrews (founded 1754) and Marylebone Cricket Club (‘MCC’) (founded 1787) in their capacity as unincorporated members’ clubs used to govern their own particular sport until the twentieth century when they handed over to more representative bodies. And it was not until the twenty-first century that the St Andrews Golf Club and MCC were incorporated by Royal Charter, no doubt for purposes of prestige. But before its incorporation, MCC had as many as 18,000 full members and 4,000 associate members, owned valuable property in the shape of Lord’s Cricket Ground, and raised its own teams to play cricket at first class level. Such an unincorporated organisational structure would not have been tolerated for such a long period unless it had worked in practice. 1.9 An unincorporated association is a ‘creature of contract’.24 An unincorporated members’ club comes within this category. The club itself is not a legal entity.25 An unincorporated club comprises its members for the time being26 and such a club has been described as ‘the most anomalous group of human beings that is known to the law’.27 In Leahy v Attorney General for New South Wales28 Viscount Simmonds remarked on the esoteric nature of the unincorporated members’ club: ‘It arises out of the artificial and anomalous conception of an unincorporated society which, though it is not a separate entity in law, is yet for many purposes regarded as a continuing entity and, however inaccurately, as something other than an aggregate of its members.’ In R  v RL and JF29 (a criminal prosecution brought against two members of an unincorporated golf club for polluting a watercourse with oil from its storage tank) the Court of Appeal accepted30 that an unincorporated association has no legal identity separate from its members but then continued:31

23 The first Act which brought clubs within its purview was the Licensing Act 1902. 24 Conservative Central Office v Burrell [1982] 1  WLR  522,  CA, at 527; Baker v Jones [1954] 1 WLR 1005, at 1009. 25 Steele v Gourley and Davis (1886) 3 TLR 118, at 119; John v Rees [1970] Ch 345, at 398 (Megarry J). 26 Gaiman v National Association for Mental Health [1971] Ch 317, at 335 (Megarry J). 27 Feeney and Shannon v MacManus [1937] IR 23, at 31 (Johnstone J) (concerning The General Post Office Dining Club in Dublin). 28 [1959] AC 457, PC, at 477. 29 [2009] 1  All  ER  786 and see R  (on the application of Boyle) v Haverhill Pub Watch [2009] EWHC 2441 (Admin). 30 R v RL & JF, at [12]. 31 Ibid, at [14] and [15].

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Unincorporated members’ clubs 1.11 ‘As to fact, many unincorporated associations have in reality a substantial existence which is treated by all who deal with them as distinct from the mere sum of those who are for the time being members … As to the law, it no longer treats every unincorporated association as simply a collective expression for its members and has not done so for well over a hundred years. A great array of varying provisions has been made by statute to endow different unincorporated associations with many of the characteristics of legal personality.’ The court referred to partnerships and trade unions by way of example but these entities are of a special nature and do not count as clubs, societies or associations in the sense that we are using this phrase.32 Nonetheless, the comment about statutory endowment of legal personality is true. Our standpoint, however, is that the common law position has in no way changed over the last 100 years: a proposition recognised by the court itself when it said of an unincorporated association,33 ‘it is simply a group of individuals linked together by contract’. 1.10 The contract referred to in 1.9 is that which exists between the members themselves. In In re Sick and Funeral Society of St John’s Sunday School, Golcar34 Mr Justice Megarry stated, ‘Membership of a club or association is primarily a matter of contract. The members make their payments, and in return they become entitled to the benefits of membership in accordance with the rules’. The consideration for such a contract is the member’s subscription to the club.35 In essence an unincorporated members’ club is a club for members run by the members with no outside control: a great advantage. This in turn ensures privacy for the club’s affairs as well as flexibility. It has been said that membership of a club is not merely a contract since membership often gives the member valuable proprietary and social rights.36 On joining the club the member acquires both rights and liabilities as between himself and the other members.37 The contractual rights are easily discernible because they comprise what are compendiously called the privileges of membership. The property rights are much less easily defined, and are discussed in a later chapter.38 1.11 Member’s advantage It is generally well known, and one of its major attractions, that in an unincorporated members’ club the liability of the individual

See Lord Lindley’s dictum cited in 1.11. [2009] 1 All ER 786, at [12] and see Speechley v Allott [2014] EWCA Civ 230, at [21]. In re Sick and Funeral Society of St John’s Sunday School, Golcar [1973] Ch 51, at 59. Ibid, at 59, save as between the founder members when the consideration would be the mutual promises to join the club when formed. In those rare clubs where no subscription is payable the consideration would be the mutual promises to abide by the agreed rules. 36 John v Rees [1970] Ch 345, at 397; Rigby v Connol (1880) 14 Ch D 482, CA; Baird v Wells (1890) 44 Ch D 661: see 8.2; Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329, at 341–342 (Denning LJ). 37 The rights in question must be intended to be legally binding. Thus it has been held that the winner of a competition held by a golf club could not sue for his prize: Lens v Devonshire Club (1914) Times, 4 December (Scrutton J), cited in Wyatt v Kreglinger & Fernau [1933] 1 KB 793, CA, at 806. See also Park Promotions Ltd t/a Pontypool Rugby Football Club v The Welsh Rugby Union Ltd [2012] EWHC 1919 (QB) at [40]–[42]. 38 See 8.3. 32 33 34 35

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1.12  Formation of the Club member is limited to his entrance fee (if any) and his subscriptions.39 In Wise v Perpetual Trustee Co Ltd40 Lord Lindley put the matter thus: ‘Clubs are associations of a peculiar nature. They are societies the members of which are perpetually changing. They are not partnerships; they are not associations for gain; and the feature which distinguishes them from other societies is that no member as such becomes liable to pay to the funds of the society or to anyone else any money beyond the subscriptions required by the rules of the club to be paid so long as he remains a member. It is upon this fundamental condition, not usually expressed but understood by everyone, that clubs are formed; and this distinguishing feature has often been judicially recognised.’ 1.12 Committee’s disadvantage On the other hand, the responsibility for transactions and activities carried on by the club rests normally with the managing committee. It is they to whom creditors or injured persons will look for payment of the club’s debts or compensation for injuries suffered on club premises.41 This may have severe financial consequences for the members of the club who are also members of the committee42 and may be seen as a serious disadvantage of an unincorporated members’ club. 1.13 Getting started Surprising as it may seem, there is no authority as to what counts as the moment of birth of an unincorporated members’ club. It has been said: ‘In the case of a members’ club the usual procedure will be for those wishing to establish the club to hold a meeting at which a resolution will be passed embodying the decision to bring the club into being’.43 However, this statement needs qualification. If there were no rules or only draft rules at the date of the resolution, it may be asked how the club could be in existence without there being rules agreed between all the founder members, or at least the basic rules so agreed.44 It is likely that the court would have to be satisfied that there was a valid and enforceable contract between the founder members before making a finding that the club existed. Thus a resolution to establish a club with rules to be formulated later will be an inchoate contract and will have no legal significance. The question is not simply an academic one. In the unreported

39 In re St James Club (1852) 2 de GM & G 383 at 387 and 390 (Lord St Leonards LC); Steele v Gourley and Davis (1887) 3 TLR 772, at 773 (Lord Esher MR). 40 [1903] AC 139, PC, at 149. 41 Davies v Barnes Webster & Sons [2011] EWHC 2560 (Ch): see 13.5. As to liability of the committee, see 13.5 (in contract) and 13.30(3) (in tort). 42 As to protecting the committee, see 13.19 (as to contract) and see 5.57 and 13.37 (as to tort). 43 Daly’s Club Law (7th edn, 1979) p 10. 44 See Williams (representing Sustainable Totnes Action Group) v Devon County Council [2015]  EWHC  568 (Admin), where HH  Judge Cotter QC sitting as a High Court judge stated at [49] in relation to the existence of the claimant as an unincorporated association: ‘However, it does not appear to me that an identifiable membership by itself can suffice. There needs to be agreement between the members usually as reflected in a set of identifiable rules or a code or a contractual or other bond between them. Such a requirement should not be overly onerous’.

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Working men’s clubs 1.15 case of Hanuman v Guyanese Association for Racial Unity and Democracy (1996)45 the plaintiff unsuccessfully sued the officers of an unincorporated members’ club for disbursements paid by him for the benefit of the association in setting up the association. The county court judge found as a fact46 that the association did not come into being until all the expenditure had been made so that he held there was no contractual basis on which the association itself or its officers could be liable, and the Court of Appeal refused leave to appeal against that decision. Therefore it may be surmised that until all the criteria set out in 1.1 are satisfied, it cannot be safely assumed that an unincorporated members’ club has been established.

5.  Working men’s clubs 1.14 Working men’s clubs first received a statutory definition under section 8(4) of the Friendly Societies Act 1875, namely, ‘societies for purposes of social intercourse, mutual helpfulness, mental and moral improvement, and rational recreation’. Many such clubs were registered under this Act or its successors but such registration was not mandatory. Many working men’s clubs were and are unincorporated members’ clubs and many others were and are registered under the Industrial and Provident Societies Acts (now consolidated under the Co-operative and Community Benefit Societies Act 2014) and thus come within the category of community clubs.47 Under the Friendly Societies Act 1992 no further registration of working men’s clubs may take place under the Friendly Societies Act 1974 but clubs already registered are permitted to continue to function under the aegis of the 1974 Act.48 1.15 Advantages The advantages of registration under the Friendly Societies Act are that it provides a structured and orderly framework for the club to carry on its activities.49 The club must have rules binding on its members;50 it must keep proper books of account;51 and it may invest its funds;52 it may make loans to its members;53 and it may make charitable donations for the benefit of its members.54 Although the club will remain a voluntary unincorporated members’ club, registration under the Act means that the club’s property vests in one or

45 Reference LTA/96/5434/G: before Aldous and Phillips  LJJ on 13  June 1996; Lexis citation 1239. 46 What facts the judge relied on to come to this conclusion do not appear from the Court of Appeal judgments. 47 The Financial Conduct Authority keeps no separate record of working men’s clubs registered under the Friendly Societies Act. The umbrella organisation, the Working Men’s Club and Institute Union, currently (2020) represents some 2,200 working men’s clubs but does not record their type of constitution. Anecdotal evidence suggests that their number is falling and will continue to fall. 48 Friendly Societies Act 1992, s 93(2) and Friendly Societies Act 1974, s 7(1) as amended by the 1992 Act, Sch 16, para 4(a). Section 7(1)(b)–(f) of the 1974 Act identifies the five nonfriendly societies which may remain under the aegis of this Act, but only working men’s clubs satisfy the essential criteria set out in 1.1. 49 Friendly Societies Act 1974, s 7(2). 50 Ibid, s 22. 51 Ibid, s 7(2)(a) and Sch 2, paras 6 and 8. 52 Ibid, s 46. 53 Ibid, s 48. 54 Ibid, s 52.

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1.16  Formation of the Club more trustees of the club55 and legal proceedings concerning its property will be in the name of the club.56 Registration also means that the club automatically has provisions governing the resolution of disputes57 and what happens in the event of dissolution.58 1.16 Statutory conversion Owing to the eventual demise of the Friendly Societies Act  1974, Parliament has encouraged working men’s clubs to adopt a different structure. By special resolution such a club may determine to convert itself into a company under the Companies Act 2006,59 or by the consent of the members duly obtained60 a club may apply to the FCA for registration as a community club under the Co-operative and Community Benefit Societies Act 2014.61

6.  Community clubs 1.17 In Co-operative Group (CWS)  Ltd v Stansell  Ltd62 Lord  Justice Mummery explained the background to co-operative societies and industrial and provident societies: ‘During the 19th century many bona fide co-operative societies and other industrial and provident societies were formed. Their purpose was to make profits from the personal participation and exertions of their members (“industrial”) and to apply the profits in making provision for their members’ future (“provident”). Acting together in a business-like and self-help way for the mutual benefit of members was a laudable activity encouraged and facilitated by legislators. There was a series of Industrial and Provident Societies Acts: 1852, 1862, 1867, 1876 and 1893. There were parallel developments and similar legislation governing friendly societies, building societies and trade unions. There are now about 8,300 industrial and provident societies. In general, they are subject to simpler procedures and less formal regulation than registered companies, which are governed by legislation of ever increasing complexity, much of it needed to protect the public.’ 1.18 The focus of the original legislation was on the working class. An example in practice is the case of Trebanog Working Men’s Club and Institute Ltd v Macdonald,63 where the club was registered under the Industrial and Provident Societies Acts 1893 to 1913 and where the object of the club was stated in its rules as being: ‘to carry on the business of club proprietors, by providing for the use of its members, and for such associates… as are admitted to honorary membership,

Friendly Societies Act 1974, ss 54 and 58. See further 5.19. Ibid, s 56. See further 19.13 and 19.33. Ibid, ss 76 and 79. Ibid, ss 93 and 94. Ibid, s 84(1). Such consent must be obtained by the procedure required for a proposal to amend the rules of the club: ibid, s 84A(1). 61 Ibid, s 84A and Sch 6A (inserted by the Friendly Societies Act 1992, Sch 16, paras 1 and 32). 62 [2006] EWCA Civ 538, at [2]–[3] 63 [1940] 1 KB 576, CA. 55 56 57 58 59 60

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Community clubs 1.21 the means of social intercourse, mutual helpfulness, mental and moral improvement, rational recreation, and the other advantages of a club.’ Because of the attraction of incorporation the focus was widened under the subsequent Industrial and Provident Societies Acts to include all classes of persons involving, for instance, golf, tennis and rugby clubs. Accordingly, a registered society might be carrying on the business of a social club as in the Trebanog case or be carrying on the business of a tennis club as in Addiscombe Garden Estates Ltd v Crabbe.64 The purpose of the business activity of such clubs is not to make a trading profit for its members but instead to foster and develop comradeship at a members’ club.65 1.19 The current Act is the consolidating Co-operative and Community Benefit Societies Act 2014 (‘CCBSA 2014’),66 whereby the well-known epithets of ‘industrial’ and ‘provident’ have been discarded. Under the earlier and the current legislation the community benefit society must be carrying on an industry, business or trade which is being, or is intended to be, conducted for the benefit of the community.67 This benefit is an essential condition for registration by the Financial Conduct Authority.68 The society can be wholly charitable or benevolent, but it does not have to be, as long as it is conducting its business entirely for the benefit of the community.69 All members must hold shares in the society.70 1.20 It is important to remember that in the definition of a club which we use (see 1.1) one of the essential criteria of a club is that it does not exist simply for the purposes of trade or making a profit for its members. Thus a community benefit society established under CCBSA  2014 must be able to show that it will benefit persons other than its own members; that its business is in the interests of the community; and that it is suitable for registration because it is non-profit-making. It may also choose to apply a statutory asset lock, which puts a legal restriction on how the society can use its assets.71 A typical example will be a housing association which provides housing for various groups within the community. A  football supporters’ club is another example. 1.21 Advantages The advantages of registration under CCBSA 2014 are: (1) that upon registration the club becomes a body corporate by its registered name, with perpetual succession and a common seal, the members having limited liability

64 [1958] 1 QB 513, CA. 65 See Josling and Alexander, The Law of Clubs (6th edn, 1987) at p 190. 66 Section 151 of and Sch  7 to the 2014 Act repealed and replaced the six Industrial and Provident Societies Acts 1965, Benefit Societies and Credit Unions Act 2010 and key parts of the Co-operative, Community Benefit Societies and Credit Unions Act 2010. 67 See the Co-operative and Community Benefit Societies Act 2014, s 2(1)(b) and 2(2)(a)(ii). This constitutional requirement does not apply to co-operative societies: see 1.6(5). 68 Financial Conduct Authority’s Finalised Guidance 15/12, published 30  November 2015, para 5.2. 69 Ibid, paras 5.5 and 5.6. 70 Ibid, paras 6.2–6.17. 71 See Financial Conduct Authority’s Finalised Guidance, paras 3.28–3.31. The optional statutory asset lock requires a rule worded precisely in accordance with the Community Benefit Societies (Restriction on Use of Assets) Regulations 2006, SI 2006/264: see reg 2 and Sch 1. This asset lock, however, is voluntary: see reg 4.

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1.22  Formation of the Club as under the Companies Acts;72 and (2) that upon registration all the property of the club will vest in the club itself.73 Registration also has the advantage of providing a structured and orderly framework for the club to carry on its activities. The club must have rules binding on its members;74 it must keep proper books of account;75 it must make annual returns to the regulating authority;76 it must display its latest balance sheet at its registered office;77 it may make advances to its members;78 and it may invest its funds.79 Registration also means that the club automatically has provisions governing the resolution of disputes80 and what happens in the event of dissolution.81 1.22 Disadvantages The disadvantages of registration under CCBSA 2014 are the loss of the club’s control of its own affairs, the inflexibility of its rules and the loss of privacy appertaining to its affairs. For example, on this last point the club must supply upon request, free of charge, to every person interested in the funds of the club a copy of the latest annual return or audited balance sheet.82 1.23 Getting started To form a club, application is made to the FCA, who will provide the necessary paperwork.83 A fee is payable. The application must be made by at least three persons wanting to register a new club.84 The word ‘Limited’ must be the last word of the name of the club, unless the FCA is satisfied that the club’s objects are wholly charitable or benevolent.85 If the club is a charity, it does not need to register with the Charity Commission.86 1.24 Statutory conversion By sections  112–117 of CCBSA  2014 there is power to convert from a community club into a company club or vice versa. The Treasury also has power, through secondary legislation, to assimilate certain parts of mutual society law into company law.87 In addition, by section 229 of the Charities Act 2011 there is power to convert from a community club into a charitable incorporated organisation (‘CIO’).

72 73 74 75 76 77 78 79 80 81 82 83 84 85 86

87

Co-operative and Community Benefit Societies Act 2014, s 3. Ibid, s 3(5). Ibid, s 15. Ibid, s 75. Ibid, s 89. Ibid, s 81. Ibid, s 34. Ibid, s 27. Ibid, ss 137–140. Ibid, s 126. Ibid, s 90. There is no statutory definition of the expression ‘person interested’ and it is arguable that this would include a creditor of the club. Information and a form may be obtained from the FCA’s website, www.fca.org.uk/firms/ mutual-societies-forms. Co-operative and Community Benefit Societies Act 2014, s 3(2)(b). Ibid, s 10(2)–(4). At the time of writing (2020), charitable community benefit societies are not required to register with the Charity Commission but can gain appropriate tax relief from HMRC by registering with them on the basis that they have wholly charitable purposes. In due course, such societies will only retain charitable status if they have a ‘principal regulator’. So far, only registered social landlords are required to meet this requirement. Co-operative and Community Benefit Societies Act 2014, ss 134–136.

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Company clubs 1.28

7.  Company clubs 1.25 Incorporation of a club under company legislation has been available since 1855. Companies in the United Kingdom are now regulated by the Companies Act  2006, which has the dubious distinction of being the longest parliamentary Act ever passed, with 1,300 sections and 16 schedules.88 It is generally agreed that one-third of the Act restates the law, one-third modifies it, and one-third is completely new. The Act provides a comprehensive code of company law. Because of its length, its complexity and the need for underlying regulations the Act was brought into force by stages and came fully into force on 1 October 2009. 1.26 At law a company club is a very different creature from an unincorporated members’ club.89 The club itself will be a legal person90 distinct from the members themselves.91 Despite incorporation, where the company is composed exclusively of the members for the time being of a club, it will constitute a members’ club since the incorporation will simply be ‘a convenient instrument or medium for enabling the members to conduct a club, the objects of which are immune from every taint of commerciality’.92 Such an arrangement does not alter the relationship of the members amongst themselves. This will be the same as obtains in an unincorporated members’ club, that is to say, the contractual relationship will be governed by the rules of the club. Incorporation with limited liability under the Companies Act 2006 takes one of two forms: either as a company limited by shares,93 or a company limited by guarantee.94 1.27 Company limited by shares This normally has working capital created by the issue of shares. Members invest their capital into the company by purchasing the shares in the expectation that a dividend will be paid in respect of those shares. Therefore these companies are usually formed with the idea of trade or profit in mind. In its constitutional document the company must state that the liability of its members is limited to the amount unpaid on the shares held by them.95 1.28 It is important to ensure that after incorporation provision is made for all the members of the club to become members of the company. This is because if there is a holding of the shares by non-members of the club, the club will cease to be a members’ club but will become a proprietary club with the company as the proprietor.96 Another area of difficulty, if shares of the company are held by nonmembers of the club, is the granting of a club premises certificate authorising the supply and sale of alcohol, since such a club will be unable to fulfil the condition

88 89 90 91 92 93 94 95 96

The Corporation Tax Act 2009 has 1,330 sections but only 4 schedules. The number of company clubs is unknown since nobody keeps such a record. Companies Act 2006, s 16(2). Salomon v Salomon & Co Ltd [1897] AC 22. IRC v Eccentric Club Ltd [1924] 1 KB 390, CA, at 421 (Warrington LJ). The Eccentric Club, a social club, was a not-for-profit company limited by guarantee. Companies Act 2006, s 3(2). Ibid, s 11. Ibid, s 3(2). This is implicit from the judgment of Lord  Evershed  MR in Automobile Proprietary Ltd v Brown (VO) [1955] 1 WLR 573, CA, at 585–587 (concerning the Royal Automobile Club) where he refers to Challoner v Robinson [1908] 1 Ch 49, CA and IRC v Eccentric Club Ltd [1924] 1 KB 390, CA.

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1.29  Formation of the Club set out in section 63(2)(b) of the Licensing Act 2003 (rules and arrangements must benefit the club, not third parties). 1.29 If a prospective member wishes to join the company he will have to subscribe for one or more shares in the company, but usually restricted to one share. And shares may not be issued for less than their par (nominal) value.97 It is possible for a club to issue penny shares at par value but a large authorised share capital would be required to allow for expansion of the membership, and the articles would have to remove the statutory rights of pre-emption which apply to new issues of shares and which require them first to be offered to existing shareholders.98 More problems arise on the exit of the members from the club. A mechanism is required to cope with members leaving the club or being expelled. Shares cannot be cancelled without the consent of the court.99 Shares can be bought back by the company but only by following the detailed procedure set out in the Companies Act 2006,100 and this would not be practicable as a means of dealing with a regular turnover of membership. A solution might be to issue redeemable shares provided there were some shares which were not redeemable.101 The date of redemption would need to be fixed in the articles,102 which would not create a suitably flexible method for dealing with members’ resignations. A  better solution would be a requirement that when a member left the club for any reason, another potential member would have to buy his share(s), alternatively the shares would have to be transferred into a holding trust or other similar entity. This last-mentioned transfer would not by itself remove the voting rights previously attached to the shares, so some provision would have to be included in the articles to accommodate the suspension of the rights attached to the ‘floating’ shares. Each retiring member must sign a stock transfer form and the directors would then have to approve the transfer to the new member. 1.30 Company limited by guarantee This is not allowed to have any share capital.103 Accordingly, there is no question of any dividend being paid by the company to the members. Instead of buying shares the members of the company give a guarantee. In its constitutional document the company must state that the liability of its members is limited to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up.104 The amount of the guarantee must be specified in the statement of guarantee.105 The amount of the guarantee is entirely a matter for the members of the company: it may be £1 or £10,000. It goes without saying that the larger the guarantee the more likely it is that traders will do business with the company, but many members feel that a substantial guarantee breaches the cardinal rule of a members’ club that liability should be limited to the member’s entrance fee and subscriptions. By

97 Companies Act 2006, s 542(1). 98 Ibid, s 561. A private company can exclude the shareholders’ right of pre-emption: ibid, s 567(1). 99 Ibid, s 641. 100 Ibid, Part 18, Chapters 1 and 4. 101 Ibid, s 684(4). 102 Ibid, s 685(4). 103 It was previously allowed but since 22  December 1980 no further companies limited by guarantee can be registered with a share capital: Companies Act  1980, s  1(2) and Companies Act 2006, s 5. 104 Companies Act 2006, s 3(3). 105 Ibid, s 11(3).

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Company clubs 1.33 way of example, under article 2 of the 2008 Model Articles for private companies limited by guarantee the liability is limited to £1.106 1.31 Where a club is incorporated as a company limited by guarantee, the members of the company will be the members of the club. A new member will simply apply to the company for membership in whatever form is required by the articles. Under article 21 of the 2008 Model Articles the form has to be approved by the directors. A member may withdraw from membership of the company by complying with the procedure laid down in the articles. Under article  22(1) of the 2008 Model Articles a member may withdraw by giving seven days’ notice to the company in writing. Alternatively, the articles may provide for membership to be transferable, although it is advisable for clubs to make its membership nontransferable (for example, article 22(2) of the 2008 Model Articles stipulates that membership is not transferable). No pre-emption rights apply; and when a member leaves the company, the fact is simply noted in the register of members. Thus any change in the membership can be automatically reflected in the identity of the guarantors, so that there should never be any disparity between the membership of the company and the membership of the club. A company limited by guarantee may be entitled to charitable grants or awards from public funds,107 whereas a company limited by shares will not qualify for those benefits without a carefully drafted tailor-made provision in its articles. A member’s rights and liabilities under a company limited by guarantee are basically the same as under a company limited by shares (save as to those matters dealing with shares) and the same regime will apply to a director’s duties. 1.32 A company limited by guarantee has a greater simplicity in its corporate structure than a company limited by shares. This is demonstrated by the fact that the 2008 Model Articles for companies limited by guarantee run to 39 articles whereas the 2008 Model Articles for companies limited by shares run to 53 articles. A  clear example of this greater simplicity relates to the principles governing admission to and withdrawal (or expulsion) from membership of a company. The straightforward process of admission described in 1.31 should be compared with the more complex admission procedures for companies limited by shares, the latter procedures being found in a combination of the articles of association, the Companies Acts, the common law applicable to companies and any shareholders’ agreement. 1.33 Private company The Companies Act  2006 went out of its way to simplify the corporate regime for most privately held companies. Significant changes include: (1) the company’s articles of association have become its main constitutional document (this provision applies to all companies)108 and any existing memorandum of association will be treated as part of its articles;109 (2)

the company is no longer required to have a company secretary;110

106 Companies (Model Articles) Regulations 2008, SI 2008/3229. See Appendix I. 107 Where, for example, there is a ban on distribution of profits on dissolution. 108 Companies Act 2006, s 17(a). 109 Ibid, s 28(1). 110 Ibid, s 270(1).

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1.34  Formation of the Club (3)

the company is no longer required to have an auditor;111

(4)

the company is no longer required to hold an AGM;112

(5)

the members are enabled to pass written resolutions without the need for a meeting;113

(6) the company can convene meetings at short notice where the consent is given by holders of 90% of the members having the right to attend and vote at the meeting.114 1.34 Small company Introduced in 2006, most company clubs will also come within the ‘small company’ regime, that is to say, a company which in any given year satisfies two or more of the following criteria:115 (1)

its turnover is not more than £10.2 million;

(2)

its balance sheet total is not more than £5.1 million;

(3)

the number of employees is not more than 50.

1.35 Micro-entity Introduced in 2013 as a sub-classification of the small company,116 company clubs may qualify for the more generous relaxation of accounting obligations provided for micro-entities. To take advantage of this status the club must, in any given year, satisfy two or more of the following criteria:117 (1)

its turnover is not more than £632,000;

(2)

its balance sheet total is not more than £316,000;

(3)

the number of employees is not more than 10.

1.36 The benefit of the small company is that its directors are entitled to file abridged accounts, whereas in relation to the micro-entity its directors are entitled to file a simpler balance sheet and simpler profit-and-loss accounts and they do not have to prepare an annual directors’ report.118 1.37 Community interest company In 2004 the government introduced a new type of company called a community interest company (‘CIC’).119 CICs are formed under the Companies (Audit, Investigation and Community Enterprise) Act 2004120 and are subject to this Act and company law generally. The club will either be a company limited by shares or limited by guarantee.121 This form of

111 Companies Act 2006, s 485(1). 112 Ibid, s 336(1). 113 Ibid, s  288. The procedure for these resolutions is set out in ss  289–300. The required majority for passing these resolutions is a simple majority for an ordinary resolution (s 282) and a 75% majority for a special resolution (s 283). 114 Ibid, s 307(4)–(6). 115 Ibid, s  382(3), as amended by The Companies, Partnerships and Groups (Accounts and Records) Regulations 2015, SI 2015/980, reg 4(3)(a)(b). 116 As a consequence of EU Directive 2012/6/EU. 117 Companies Act 2006, s 384A, inserted by The Small Companies (Micro-Entities Accounts) Regulations 2013, SI 2013/3008, reg 4. 118 Ibid, s 415A(1) inserted by The Companies Act 2006 (Amendment) (Accounts and Reports) Regulations 2008, SI 2008/393, reg 6(2). 119 Companies (Audit, Investigation and Community Enterprise) Act 2004, Part 2 (ss 26–63). 120 See also the Community Interest Company Regulations 2005, SI 2005/1788. 121 Companies (Audit, Investigation and Community Enterprise) Act 2004, s 26(2).

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Company clubs 1.39 structure may be preferred by clubs to charitable status because there is greater flexibility in terms of its activities. It is less regulated than a charity, being overseen by the Regulator of the Community Interest Companies;122 and it is not managed by trustees but by directors who can receive reasonable remuneration.123 The important point to note is that the club’s constitution will contain a statutory ‘asset lock’ which means that there are limits placed on the CIC’s ability to make distributions to members or to make interest payments on debentures and debts.124 These companies are tailor-made for social enterprises whose activities are being carried on for the benefit of the community. In March 2017 there were over 13,000 CICs,125 a number of which are clubs or associations which satisfy the criteria set out in 1.1, such as the Lowerhouse Cricket Club CIC in Lancashire (established in 1862) or the Good Loaf CIC in Northamptonshire (an artisan bakery providing employment and training for vulnerable women). 1.38 Advantages of incorporation The perceived advantages of a company club are: (1) it protects the managing committee from liability in respect of the club’s transactions and activities which result in a claim being made against the club: it is the club itself that will bear the responsibility; (2) it relieves the committee member from being personally involved in any litigation concerning the club: the claim or defence will be in the name of the club; (3) ownership of the club’s property will reside in the club itself as opposed to the trustee members or ordinary members of the club;126 (4)

because ‘perpetual succession’ is a consequence of separate legal personality, it enables gifts and bequests to be made to the club more easily, especially if the gift or bequest is intended to be for the benefit of future members as well as present members;

(5) borrowing is easier because companies can create ‘floating charges’ over their assets which means a creditor can secure a loan made to the company without hindering the use of the assets in the meantime. 1.39 Disadvantages of incorporation One of the disadvantages of incorporation is that the club will be subject to the whole regimen of statutory control exercised through the courts. Further disadvantages (subject to the relaxations for small companies and micro-entities discussed in 1.34 and 1.35) are the costs and the hassle of complying with statutory obligations on an ongoing basis, for example, the filing of annual accounts127 and a confirmation statement at Companies House. The simpler confirmation statement procedure replaced the former requirement to submit a full annual return from 30  June 2016.128 It

122 Companies (Audit, Investigation and Community Enterprise) Act 2004, s 27. 123 Ibid, ss 32(4)(e) and 45. 124 Ibid, s 30. 125 Regulator of Community Interest Companies, Annual Report 2016–2017 (2017) p 6. 126 As to trustees holding the club’s property, see 5.19 and 8.25. 127 Companies Act 2006, ss 444–444A. 128 Ibid, ss 853A–853L inserted by Small Business, Enterprise and Employment Act 2015, Pt 8, s 92.

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1.40  Formation of the Club is still necessary to file a notification of a change of company director129 and this compliance still requires both expenditure and diligence: for example, the omission of the club secretary to send to the registrar of companies in the prescribed form notification of a change of director could result in the prosecution of the company and its officers and their being fined, with a daily default fine for continued contravention.130 Because of public regulation there is also some loss of privacy about the club’s affairs.131 1.40 Getting started To form a company, any two or more persons associated for a lawful purpose may, by subscribing their names to a memorandum of association and complying with the requirements of the Companies Act 2006 in respect of registration, form an incorporated company.132 It is also common to purchase an ‘off the shelf’ company, where all the formalities have already been carried out, and to make suitable changes to the company name and its memorandum and articles of association. It is usual to employ a solicitor to make the necessary arrangements. 1.41 For CICs, the formation and registration is similar to that of an ordinary limited company. The application documents should be delivered to the registrar of companies who will forward them to the Regulator of the Community Interest Companies who then deals with the matter by providing model memorandum and articles for the CIC to adopt or modify.133 The title of the company must end with CIC such as the ‘Basset Riverside Association CIC’.134 1.42 Statutory conversion An existing company may convert into a CIC135 and so may an existing company which is already registered as a charity.136 On the other hand, a CIC may convert into a community club under the Co-operative and Community Benefit Societies Act 2014 where it has put in place a restriction on the use of assets in accordance with the Community Benefit Societies (Restriction on Use of Assets) Regulations 2006.137 In addition, a CIC may convert into a charitable incorporated organisation under the Charities Act 2011.138

8.  Charitable clubs 1.43 There may be occasions when it is suitable or desirable for a club or intended club to register as a charity. Historically charities existed to provide funds for deserving causes over an indefinite period of time. That historic reason is now coupled with tax advantages whereby the charity is better enabled financially to carry out its activities.139 A  well-known example is the Variety Club of Great

129 Companies Act 2006, s 167(1). 130 Ibid, s 167(4). 131 Eg relating to its membership list: see 5.100. 132 Companies Act 2006, s 7. 133 Companies (Audit, Investigation and Community Enterprise) Act 2004, s 36. See Appendix I for the model articles of association relating to a CIC limited by guarantee. 134 Ibid, ss 33(1) and 36A(2)(b). 135 Companies (Audit, Investigation and Community Enterprise) Act 2004, ss 38 and 38A. 136 Ibid, s 39. 137 SI 2006/264; this legislation continues in force by virtue of CCBSA 2014, s 151 and Sch 5. 138 Charities Act 2011, s 234. 139 The advantages are discussed in 17.18.

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Charitable clubs 1.44 Britain, which is a company limited by guarantee and registered as a charity, whose members are in the world of show business, and which assists disabled and disadvantaged children. Charities are governed by the Charities Act 2011.This Act lays down two criteria which a club’s activities must fulfil in order to become a charity: (1) they must fall within one or more of the defined charitable purposes set out in the Act;140 and (2) they must provide a benefit to the public.141 There are 12 specific purposes and one general set of purposes at the end of the list: (1)

the prevention or relief of poverty;

(2)

the advancement of education;

(3)

the advancement of religion;

(4)

the advancement of health or the saving of lives;

(5)

the advancement of citizenship or community development;

(6)

the advancement of the arts, culture, heritage or science;

(7)

the advancement of amateur sport;

(8)

the advancement of human rights, conflict resolution or reconciliation, or the promotion of religious or racial harmony or equality and diversity;

(9)

the advancement of environmental protection or improvement;

(10) the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage; (11) the advancement of animal welfare; (12) the promotion of the efficiency of the armed forces of the Crown,142 or of the efficiency of the police, fire and rescue services or ambulance services; (13) any other purposes that are not within paragraphs (1)–(12) but which are recognised as charitable purposes by section 5 of the 2011 Act (recreational and similar trusts, etc) or under the charity law in force immediately before 1  April 2008 and which may reasonably be regarded as analogous to, or within the spirit of: (a) any purposes falling within any of paragraphs (1)–(12) above, or (b) any purposes which have been recognised, under the law relating to charities in England and Wales in the past, or (c) those purposes falling within this paragraph. 1.44 The set of purposes in (13) above means that all existing charities remain charities in accordance with the earlier permitted purposes,143 namely, (a) the relief of poverty, (b) the advancement of education, (c) the advancement of religion, and (d) other purposes beneficial to the community not falling under the preceding heads.144 Falling under head (d), for example, is the provision of facilities 140 Charities Act 2011, ss 2 and 3(1). 141 Ibid, ss 2(1)(b) and 4. 142 A  curious purpose: some may look askance at a charitable gift to promote bigger and better weaponry. 143 See Statute of Uses 1601. 144 Charities Act 2011, s 3(1).

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1.45  Formation of the Club for recreation or other leisure-time occupation, if the facilities are provided in the interests of social welfare.145 Under the old law the purposes identified in heads (a), (b) and (c) were presumed to be of a charitable nature. This presumption no longer exists; all charities must now prove that their activities are providing or will provide a benefit to the public.146 1.45 The club as a charitable incorporated organisation Prior to 2012 there were three types of charity structure: (1) the unincorporated association; (2) the charitable company limited by guarantee; and (3) the trust. The Charities Act 2011 consolidated the reforms introduced by the Charities Acts 1993 and 2006. In 2012 the Charities Act  2011 introduced a new legal form for a charity called the charitable incorporated organisation (‘CIO’).147 Hitherto all incorporated charities were subject to two sets of regulations, one as a charity and the other as a company. This innovation simplifies matters whereby the said organisation is ‘a new incorporated form of charity which is not a limited company nor subject to company regulation’.148 However, there are two forms, the ‘Foundation’ model and the ‘Association’ model. It should be noted that only the latter comes within the realm of club law in that it has association members as well as charity trustees. For the sake of clarity we shall henceforth refer to the ‘Association’ charitable incorporated organisation as the Association CIO. 1.46 Getting started The club must make an application to register with the Charity Commission, on its application form as a charity or as a CIO. A club will not be registered as a charity unless it has an income of more than £5,000 per annum. New charities and most existing ones are eligible to become or to convert to a CIO.149 The Charity Commission will consider an application to voluntarily register a charity with income of less than £5,000 in ‘exceptional circumstances’.150 Small unregistered charities can register with HM Revenue & Customs (‘HMRC’) for tax relief available to charities by using their HMRC charity number as evidence of charitable status. Some charities, such as universities, are exempt from registration and thus not subject to the Commission’s supervisory powers; others are excepted from the need to register but remain subject to the Commission’s jurisdiction.

145 Charities Act 2011, s 5. 146 Ibid, ss 2(1)(b) and 4. 147 Ibid, ss 204–250. 148 See the preface to the Constitution of a Charitable Incorporated Organisation published by the Charity Commission in October 2016. The Charities Act 2011, s 205(1) states that the CIO is a body corporate. Unhelpfully the expression ‘body corporate’ is not defined in this Act or in the Companies Act 2006. It is a generic term whereas ‘limited company’ and ‘charitable incorporated organisation’ are individual species of the genus. Hence the Charity Commission’s quotation in the text. 149 Charities Act 2011, Part 11. 150 See on its website the Charity Commission’s ‘How to register a charity’, last updated 2 February 2015.

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Community amateur sports clubs 1.49

9.  Community amateur sports clubs 1.47 The government recognised the important role that sports clubs play in promoting social and community inclusiveness and, in particular, promoting good health through regular exercise. But this contribution was not acknowledged by the tax system. It is an historical fact that the sports club sector has suffered from a lack of cash and a lack of adequate facilities, despite the many volunteers involved within the sector. Worse still, there has been a decline in participation in healthy sports which has added to the problems of local sports clubs. In 2002 the government introduced a package of tax advantages to support the community amateur sports club (‘CASC’).151 The Corporation Tax Act  2010, together with later amendments and the Community Amateur Sports Clubs Regulations 2015,152 restates their constitutional and tax position.153 1.48 First, there are distinctions to be noted. To qualify as a charity the club must promote the advancement of amateur sport, and the club needs to register with the Charity Commission. To qualify as a CASC the club must provide as its main purpose facilities for, and promote participation in, one or more eligible sports, and the club needs to register with HM  Revenue & Customs. However, a qualifying sport for charitable purposes may include a sport which exercises the mind only, such as chess;154 in CASCs only physical sports are eligible because they are defined by reference to the Council of Europe’s European Sports Charter 1993.155 1.49 There are now (2020) more than 6,300 registered CASCs.156 The decision to register should not be taken lightly, however, because once registered there is no power to de-register (‘once a CASC, always a CASC’).157 If the members have their eye on the main chance that a supermarket may come along and buy their club and grounds with the resulting profit to be divided amongst themselves, CASC is not a route which they should choose. A club is entitled to be registered as a CASC if it is, and is required by its constitution to be, a club which:158 (1)

is open to the whole community;

(2)

is organised on an amateur basis;

(3) has as its main purpose the provision of facilities for, and the promotion of participation in, one or more eligible sports; 151 Finance Act 2002, s 58 and Sch 18. 152 SI 2015/725. 153 Corporation Tax Act 2010, ss 658–671. See 17.19. 154 This is because of the definition of ‘sport’ in s 3(2)(d) of the Charities Act 2011: ‘Sports or games which promote health by involving physical or mental skill or exertion’. 155 Corporation Tax Act  2010, s  661(1). The United Kingdom has five Sports Councils, for England, Wales, Scotland, Northern Ireland and the UK as a whole. They apply the definition of sport (‘all forms of physical activity’) laid down by the Council of European Sports Charter 1993 (see Corporation Tax Act 2010, s 661(2) and Relief for Community Amateur Sports Clubs (Designation) Order 2002, SI 2002/1966, for the Sports Council’s authority). However, the definition of ‘sport’ is still a matter of debate. 156 See http://www.cascinfo.co.uk/. 157 However, HMRC has the power to cancel the registration if a Revenue officer is satisfied that the club is no longer entitled to be registered as a CASC: Corporation Tax Act 2010, s 658(4)(b). This cancellation may have serious tax liability consequences. 158 Corporation Tax Act  2010, s  658(1)–(1C) as substituted or added by Finance Act 2012 s 52; Community Amateur Sports Club Regulations 2015, SI 2015/725, regs 3(a) and (b); and Finance Act 2013, Sch 21, para 4.

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1.50  Formation of the Club (4)

meets the location condition;159

(5)

meets the management condition;160

(6)

meets the income condition.161

1.50 if:162

Open to the whole community A club is open to the whole community

(1)

membership is open to all without discrimination;

(2)

its facilities are available to members without discrimination;

(3) its annual membership fees do not represent a significant obstacle to membership, use of its facilities, or full participation in its activities. By an amendment introduced by the Finance Act 2013 but treated as having effect from 1  April 2010, the issue of whether membership costs represent a significant obstacle to either membership or full participation in the club’s activities is determined by whether the costs exceed a fixed limit set by HMRC and whether the club has made arrangements to ensure that the costs do not amount to such an obstacle.163 At the time of writing (2020) the maximum limit on a membership fee was set at £31 per week but, if the fee exceeds £10 a week, a discount must be available for people who cannot afford to pay.164 1.51 A club is not prevented from being open to the whole community merely because it charges different fees for people of different descriptions, eg by having different classes of membership or by otherwise giving different groups of members different rights, providing its decision-making and other processes are open, transparent and objective. For example, a waiting list for potential members must operate on the basis that those who have waited longest are first to be admitted to membership and not by giving preference to those willing to offer services or with a certain level of competence in the sport. In particular, different treatment may be based on: (a)

the age of the member;

(b)

whether the member is a student;

(c)

whether the member is paid wages;

(d)

whether the member is a playing member;

(e)

how far from the club the member lives; or

159 Corporation Tax Act 2010, s 658(1B)(a), added by Finance Act 2010, Sch 6(3), para 32, ie, the club is established in the UK or in some other territory specified in regulations made by HMRC and whose facilities are all located in the UK or in that other territory: Corporation Tax Act 2010, s 661A and Finance Act 2010, Sch 6, para 2(3). 160 Corporation Tax Act 2010, s 658(1B)(b), added by the said schedule, para 32 ie, the club’s managers are fit and proper persons to be managers of the club: ibid, s 661B. 161 Corporation Tax Act  2010, s  658(1C), inserted by Finance Act 2010, Sch  6, paras 30 and 32 and see s 661CA added by Community Amateur Sports Club Regulations 2015, SI 2015/725, reg 4. 162 Ibid, s 659(1), as amended by Finance Act 2013, Sch 21, para 2(2). 163 Ibid, s 659(2A) as amended by Finance Act 2013, Sch 21, para 2(3). 164 Details on how to register as a CASC are available at https://www.gov.uk/register-acommunity-amateur-sports-club.

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Community amateur sports clubs 1.53 (f)

restrictions, due to limited club resources, on the days or times when different classes of membership have access to its facilities.165

Discrimination in this context may be treated as that laid down by the Equality Act 2010 insofar as it is applicable to clubs, save that discrimination on the ground of sex, age and disability may be taken into account as a necessary consequence of the requirement of a particular sport.166 1.52 Some examples may help. The club’s emphasis must be on encouraging all members to participate regardless of their ability: (a)

the Basset Cricket Club might field a number of teams, ranging in ability from recreational and novice players up to a highly competitive standard. This would be acceptable as long as the overall emphasis was on participation. If the club only allowed participation at an elite level with other members in reality being spectators rather than players, this would not be acceptable. The club’s subscription, charges or qualifying conditions for admission must not be set at such a level as to pose a significant obstacle to membership or the use of the club’s facilities;

(b) take dinghy sailing: even a basic second-hand boat and safety equipment costs several hundred pounds, so that if the Basset Sailing Club required all its members to have their own boat this would amount to a significant obstacle to membership. If the club, however, were to provide boats and equipment to new members at reasonable rates the obstacle would be removed; (c)

1.53

the club is not required to have its own premises or equipment to qualify as a CASC. The Basset Cycling Club which organised social and training rides and open competitions without owning premises would be eligible. Likewise, the Basset Swimming Club which had no facilities of its own but regularly hired the local authority’s pool to hold swimming lessons and training sessions would be eligible. Amateur status A club is organised on an amateur basis if:

(1) it is non-profit making, that is to say, any surplus income or gains are reinvested in the club and not distributed to any third parties;167 (2) it provides for members, and their guests only, the ordinary benefits of an amateur sports club (see 1.54);168 (3) its constitution provides for its net assets to be applied on its dissolution for approved sporting or charitable purposes;169 (4)

it does not exceed the limit on paid players.170

165 Corporation Tax Act 2010, s 659(3) as amended by Finance Act 2013, Sch 21, para 2(4) and see HMRC, Community Amateur Sports Clubs: Detailed Guidance Notes, last updated on 24 March 2020 at paras 2.3.1–2.3.15. 166 Corporation Tax Act 2010, s 659(2)(d): see 4.18. 167 Ibid, s 660(1)(a)–(2). A club is not prevented from being non-profit making merely because it makes donations to charities or other CASCs: ibid, s 660(3). 168 Ibid, s 660(1)(b). 169 Ibid, s 660(1)(c). 170 Ibid, s  660(1)(ba) added by Finance Act 2013, Sch  21, para  3(2) and see Community Amateur Sports Club Regulations 2015, SI 2015/725, regs 11–13.

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1.54  Formation of the Club 1.54

The ordinary benefits of an amateur sports club comprise:171

(a)

the provision of sporting facilities;

(b)

the reasonable provision and maintenance of club-owned sports equipment;

(c)

the provision of suitably qualified coaches;

(d)

the provision, or reimbursement of the costs, of coaching courses;

(e)

the provision of insurance cover;

(f)

the provision of medical treatment;

(g)

the reimbursement of necessary and reasonable travel or subsistence expenses incurred by players and officials in connection with away matches;

(h) the reasonable provision of post-match refreshments for players and match officials; (i)

the sale and supply of food and drink as a social benefit which arises incidentally from the sporting purposes of the club.

The club is not prevented from providing the ordinary benefits of an amateur sports club merely because a member supplies goods and services to the club on an arm’s length basis or because the club employs members of the club on an arm’s length basis.172 1.55 The income condition To meet the income condition the total of the club’s trading receipts plus its property receipts must not exceed £100,000 in a full 12-month accounting period or a pro rata lower amount for shorter periods. For the purpose of that calculation, certain exemptions are ignored, namely, amounts up to £30,000 and £50,000 (for trading and property receipts respectively) which are allowed under sections 662 and 663 of Corporation Tax Act 2010.173 1.56 The main purpose There is nothing wrong with a CASC having social members but their number must not be disproportionate to the number of participating members nor must the social activities of the club outweigh its playing activities. Under an amendment introduced by the Finance Act 2013 but treated as having effect from 1 April 2010, a requirement that 50% of the members are participating members was laid down by HMRC. Participating members include those who maintain club facilities, drive the club’s vehicles, or are needed to accompany disabled club members. Records must be kept to establish that the 50% requirement is met. A social member is a member who does not participate, or who participates only occasionally, in the sporting activities of the club. Occasional participation means, broadly speaking, participation in sporting activities less often than once a month.174 1.57 Multi-sports club Some sports clubs provide facilities for more than one sport. In this event some thought needs to be given to the structure of the club 171 Corporation Tax Act 2010, s 660(4)–(4A) as amended by Finance Act 2013, Sch 21 and Community Amateur Sports Club Regulations 2015, SI 2015/725, regs 10–14. 172 Ibid, s 660(5). 173 Ibid, s 661CA added by Community Amateur Sports Clubs Regulations 2015, SI 2015/725, reg 4. 174 Ibid, s  660A added by Finance Act 2013, Sch  21, para  5 and see Community Amateur Sports Club Regulations 2015, SI 2015/725, regs 15–19.

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Choosing the essential structure 1.60 since it affects the eligibility of CASC status. There is no problem if the club is an integrated single entity. If the club is a single entity with integrated sub-sections there is again no problem provided that the club consolidates into one set of club accounts the income and expenditure of all the integrated sub-sections and still meets the income condition. Where there is a lead club (which may own and manage the facilities) with independent affiliated clubs being allowed to use its facilities, no single club can be registered as a CASC to cover all of them and each individual club (including the lead club) must decide for itself whether to register as a CASC. Where there is a ‘mother’ club (which owns or rents the property and provides the facilities) with affiliated member clubs, the ‘mother’ club will be eligible as the single club to cover them all, provided that: (a) the individual members of the affiliated clubs are entitled to become members of the ‘mother’ club; and (b) the ‘mother’ club itself actively promotes participation in eligible sports as opposed to being merely a passive provider of premises and facilities. If the ‘mother’ club cannot satisfy the proviso, each affiliated club must decide for itself whether to register as a CASC.175 1.58 Getting started The club should apply to an officer of HMRC to be registered as a CASC.176 The officer must register the club if satisfied that the club is entitled to be registered.177 The officer must notify the club of his or her decision either to register the club or to refuse to do so.178 HMRC may publish the names and addresses of registered clubs.179 An appeal lies to a tribunal against any decision made by the officer, if made within 30 days of the notification of the decision.180

10.  Choosing the essential structure 1.59 The crucial question as to what legal structure potential members should adopt when establishing or running a club has no simple answer. The most one can say is that, if ease of operation with no statutory interference as to its constitution or internal administration is the deciding factor, the unincorporated members’ club is a well-tried, longstanding and successful formula. If peace of mind and stability is the deciding factor, a community club or a company club may be the right answer. If incorporation is decided upon, the better vehicle for a member’s club is a company limited by guarantee rather than one limited by shares. And, if financial matters are all-important in a sports club, the CASC status may be the right answer. 1.60 A  question which is sometimes asked is whether an unincorporated members’ club should become incorporated.181 There is undoubtedly a trend towards this, especially in relation to large-scale clubs. However, if the club is in a

175 HMRC, Community Amateur Sports Clubs: Detailed Guidance Notes, as detailed in footnote 165 above. 176 Corporation Tax Act 2010, s 658(2). 177 Ibid, s 658(3). 178 Ibid, s 670(a)–(b). 179 Ibid, s 658(5). 180 Ibid, s 671. 181 Conversion into a company from an unincorporated members’ club is not formality but a matter of substance: Gaiman v National Association for Mental Health [1971] Ch 317 at 335 (Megarry J). For one thing the directors of the company will have duties towards the company itself, not merely duties to the other members as in an unincorporated members’ club.

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1.61  Formation of the Club healthy financial state and there is no need or intention to mortgage property or borrow monies, we consider that the statutory controls and obligations referred to in 1.39 will usually outweigh the benefits of incorporation. It is, of course, vital that an unincorporated members’ club is governed and operated strictly in accordance with its rules just as a community club or company club must be run in accordance with its statutory obligations. There may also be some tax implications in changing from an unincorporated status to an incorporated one.182 1.61 In Co-operative Group (CWS) Ltd v Stansell Ltd183 Lord Justice Mummery cast an interesting sidelight on the question when he said that, in general, co-operative societies and community benefit societies were subject to simpler procedures and less formal regulation than incorporated companies, which he pointed out are now governed by legislation of ever increasing complexity.184 This would suggest that, if appropriate, the formation of a community club might be a better proposition than a company club. 1.62 Realising from the point of view of organisation and economy that sometimes running a club is by no means an easy task, the Government has taken several steps to alter the club landscape. In 2004 the Government put forward a variation of club structure under the Companies Act 1985 called a community interest company which does not have mercantile overtones. In 2010 the Government put forward the community amateur sports club to help the finances of sports clubs. Thirdly, after some delay, in 2011 the Government brought together aspects of charitable and company law to form a less complicated structure and put forward the Association CIO. All three of these statutory solutions merit consideration in the world of club law. 1.63

Table 1 at the end of this chapter gives a summary of the available options.

11.  Specialist clubs 1.64 Literary and scientific institutions Many of the learned societies and institutions of this country were incorporated by royal charter, whilst others have been incorporated under the Companies Acts. The majority, however, are not incorporated and count as unincorporated members’ clubs. Whether incorporated or not, section 33 of the Literary and Scientific Institutions Act 1854 stipulates:185 ‘The Act shall apply to every institution for the time being established for the promotion of science, literature, the fine arts, for adult instruction, the diffusion of useful knowledge, the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collections 182 See 17.22. 183 [2006] 1 WLR 1704, CA. 184 Some measure of the disparity between the law relating to co-operative and community benefit societies and that relating to companies may be gleaned from the fact that CCBSA 2014 consists of 155 sections and 7 schedules whereas the Companies Act 2006 has 1,300 sections and 16 schedules. 185 Except the Royal Institution: s 33. Certain other institutions, such as the British Museum and the National Gallery, are governed by a specific Act of Parliament and therefore fall outside the ambit of the 1854 Act.

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Umbrella organisations 1.67 of natural history, mechanical and philosophical inventions, instruments, or designs’.186 The Act deals with the nature, constitution, property, internal regulation and dissolution of the institution, and also with legal proceedings by or against the institution, and accords privileges and powers to the institution not normally enjoyed by private clubs and institutions.187 1.65 The formation of this category of club will no doubt be in the hands of professional advisors. The longevity of this Act demonstrates its success. 1.66 Clubs with specialised activity Many of these clubs are regulated or part-regulated by statute, sometimes in order to control or restrict the club’s activities but also to the club’s advantage or to help the club function efficiently. As an example, one could take archaeological societies which would include a treasurehunters’ club.188 The members of such societies would need to take heed of say the National Heritage Acts 1980–2002, Protection of Wrecks Act 1973, Ancient Monuments and Archaeological Areas Act 1979, Protection of Military Remains Act 1986 and Treasure Act 1996 (due to be updated) plus the Codes of Practice issued by the Department of Culture, Media and Sport in relation to the last-mentioned Act. A number of categories, such as sailing clubs or golf clubs, have a governing or central organisation to which the club may belong and to whom it can often turn in the event of a problem arising. If no such organisation exists, then the local authority would no doubt give guidance or advice as to the way forward.

12.  Umbrella organisations 1.67 There are several organisations in the United Kingdom which have a large number of clubs under their jurisdiction189. Perhaps the best known is the Football Association. Under its aegis are 43 County Football Associations to which the astonishing number of some 37,500 football clubs are affiliated, involving about a million players. Other examples are Rotary International in Great Britain and Ireland which has 1,750 clubs within this territory and some 48,000 club members and the English Golf Union (‘EGU’) which has some 1,910 clubs belonging to its organisation and some 700,000 members. Sometimes the umbrella organisation like Rotary insists on all the clubs having a standard set of rules; others, like EGU, have clubs with as many different sets of rules as there are clubs. But all these clubs are genuine members’ clubs and the same general principles of club law will be applicable to them as in the case of a single, free-standing members’ club. A  problem which can occur, however, is when a member of one club affiliated to an umbrella organisation is permitted entry as of right into another club as

186 The 1854 Act applies to institutions established before this Act. An early example of such an institution was the Russell Literary and Scientific Institution, founded in 1808 to provide a library and lectures on literary and scientific subjects for its members (In re Russell Institution, Figgins v Baghino [1898] 2 Ch D 72). Another early example, still flourishing, is the Roxburghe Club, founded in 1812 and devoted to printing unpublished documents and reprinting rare texts. Sections 18–33 of the Act appear in Appendix A. 187 In re Russell Institution, Figgins v Baghino [1898] 2 Ch D 72. 188 See The Times, 26 July 1973 at p 18. 189 See footnote 47 re the Working Men’s Club & Institute Union.

29

1.68  Formation of the Club an associate. Care has to be taken in relation to the rules of the host club and in connection with the Licensing Act 2003.190

13.  Proprietary clubs 1.68 It is important to distinguish a true proprietary club from a club which is referred to by a business man in his trading or business activities. In commerce the word ‘club’ is commonly used when a trader wants to target a particular segment of the public in order to offer persons favourable trading terms or to make a promotional offer. For example, Tesco  plc, which operates a chain of grocery superstores, runs what it calls its Clubcard scheme; you apply to join its club by written application and once admitted the member obtains trading benefits from the club by way of discounted prices, etc. Such a club does not satisfy the criteria set out in 1.1. Likewise, many book clubs, clothing clubs, and holiday clubs owned by proprietors do not qualify as true clubs because they would not satisfy these criteria, in particular the second criterion (not existing simply for trade or profit) and the sixth criterion (the need for collegiality). The distinction turns on the degree of control, both financial and physical, which the proprietor chooses to exercise over the members of the club, and in some cases the dividing line between a true proprietary club and a marketing device can be a fine one. As an example of a true proprietary club, one can take the Groucho Club in London, which is a social club with many members coming from the media world. The club is owned by a proprietor who provides all the facilities and controls all the finances but there are proper club rules and, importantly, there is a membership committee comprising members of the club (plus one representative of the proprietor) which vets all applications for membership and which alone makes the decision whether to accept or reject the application.191 A proprietor may protect the name of his club by a passing-off action unless the facts show that the business was abandoned and the goodwill extinguished.192 1.69 Nevertheless, a proprietary club is a very different legal concept from a members’ club because the club will be owned by an outside person or company and the normal purpose of the club is for the proprietor to make a profit out of it.193 To draw the distinction between members’ clubs and proprietary clubs, the former are often referred to as private members’ clubs.194 The proprietor will own or provide the club premises, the furniture and the stock and will make them available to club members on such terms as he thinks fit.195 The payment for the entitlement to use the facilities provided is the member’s subscription.196 When the period of

190 See 9.34. 191 See Challoner v Robinson [1908] 1  Ch  49,  CA describing the set up and running of a proprietary club, in this instance the United Artists Club (a distraint case). 192 Ad-Lib Club Ltd v Granville [1971] 2 All ER 300; Campbell v Campbell [2016] EWHC 765 (Ch) (the band had ceased to trade; it was held that it was arguable that its goodwill had been abandoned). 193 Inland Revenue Commissioners v Eccentric Club Ltd [1924] 1 KB 390, CA, at 421 (Warrington LJ). 194 See, for example, John v Matthews [1970] 2 QB 443, DC, at 447E (Lord Parker CJ); Charter v Race Relations Board [1973]  AC  868; and Dockers’ Labour Club and Institute  Ltd v Race Relations Board [1976] AC 285. 195 Lyttelton v Blackburne (1876) 45  LJ  Ch  219; Bowyer v Percy Supper Club  Ltd [1893] 2 QB 154, DC. 196 Bowyer v Percy Supper Club Ltd [1893] 2 QB 154, DC.

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  Proprietary clubs 1.71 the subscription expires the proprietor’s obligations cease unless, and the exception needs emphasising, by consent of both parties the subscription is renewed. The relationship is solely one of contract between the proprietor on the one hand and the individual member on the other hand. There is no direct contractual relationship between the members themselves. The relationship between the member and his fellow-members will be a social one. The club, however, will not be eligible for a club premises certificate for licensing purposes. Nor is there any question of the members having any property rights in the club property.197 1.70 The liability for any debt or any transaction of the club will remain with the proprietor and so it will be he who will sue or be sued, not the members, in respect of club purchases or the conduct of its affairs. This position still applies where the proprietor has given the management of the club wholly or partly to a committee of members. 1.71 Getting started A  proprietary club will come about either because a group of persons wish to form a members’ club but do not have the money, ability or inclination to own or run a club so that they entrust the task to a person or company to do it for them, or because a proprietor sees an opportunity in the market place for a members’ club with facilities which he is able to provide.

197 Baird v Wells (1890) 44 Ch D 661, at 676 (Stirling J): see 8.1.

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2

3

Legal form

Unincorporated Working members’ club men’s club (Friendly Societies Act 1974)

Formation

Easy, cheap and informal. No Act of Parliament applies. No registration of entity. Club rules are a contract between the members.

4

5

6

7

8

Community club (Cooperative & Community Benefit Societies Act 2014)

Company Club (Companies Act 2006)

Club as community interest company (Companies (Audit, Investigation and Community Enterprises) Act 2004) (‘CIC’)

Club as charitable incorporated organisation (Charities Act 2011) (‘Association CIO’)

Community amateur sports clubs (Corporation Tax Act 2010) (‘CASC’)

Registration with FCA either as a co-operative society or as a community benefit society. Membership is as holder of a share.

Registration with Registrar of Companies either as a company limited by shares or as a company limited by guarantee. Membership is as holder of a share or as guarantor of liability.

Registration under the Companies Act 2006 plus application made to the Registrar of Companies. Membership is as holder of a share or as guarantor of liability.

Registration with the Charity Commission as a corporate body with limited liability. Membership in an Association CIO is as holder of a share.

Registration with HMRC as a CASC. The club may be either an unincorporated members’ club or a limited company.

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1

Registration not available for new clubs since 1982.

1.71  Formation of the Club

Table 1 Legal structures: a summary

33

2

Constitution

Rules agreed by Rules must members. contain those rules set out in Schedule 2 to the 1974 Act.

3

4

5

6

7

8

Rules must contain the provisions set out in section 14 of the 2014 Act.

A company has a memorandum and articles of association. The articles are the company’s internal rulebook. The club’s rules, however, will be set out in a separate and self-contained rulebook.

The rules will follow the provisions of the Companies Act 2006.

The Charity Commission will supply a set of model rules for the club to consider and adopt.

The rules will be fixed on the basis that the club is an unincorporated members’ club or a limited company, and the rules will require the approval of HMRC.

Property/ Asset holding

Individual or corporate trustees should be appointed to hold assets on trust for the members as it has no legal personality.

By statute Club as a legal Club as a legal the club’s person holds its person holds its property vests own assets. own assets. in its trustees.

Club as a legal person holds its own assets.

Club as a legal person holds its own assets.

Ownership depends on whether the club is unincorporated, or incorporated under the Companies Act 2006.

  Proprietary clubs 1.71

1

2

3

4

5

6

7

8

Liability of members

Committee members are personally liable for club debts, whereas club members are exempt.

Committee members are personally liable for club debts, whereas club members are exempt.

Liability for club debts is limited to the value of the member’s share.

Liability for club debts is limited to the value of the member’s share or to the amount of the member’s guarantee

Liability for club debts is limited to the value of the member’s share or to the amount of the member’s guarantee.

Liability for club debts is limited to the value of the member’s share.

Liability depends on whether the club is unincorporated, or incorporated under the Companies Act 2006.

Internal dispute resolution

To exclude recourse to court, the rules should deal with the resolution of internal disputes.

Internal dispute resolution is a mandatory matter for the rules.

Specific rules as to internal dispute resolution may apply. If not, a party may apply to the county court or to a magistrates’ court for determination of the dispute.

Any provision for internal resolution of a dispute must appear in the club rules or in the company’s articles.

Any provision for internal resolution of a dispute must appear in the club rules or in the company’s articles.

The Charity commission can resolve disputes about membership. Other disputes will be dealt with in accordance with the CIO constitution which will often provide for the use of mediation before resorting to litigation.

Resolution will depend on whether the club is unincorporated, or incorporated under the Companies Act 2006.

1.71  Formation of the Club

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1

Chapter 2

The Club’s Constitution or Rules

1.  The primacy of club rules 2.1 The club’s set of rules is the bedrock of club law. A well-drawn set of rules1 is crucial to the well-being and proper functioning of any club, no matter into what category the club falls. Rules should cater for all the exigencies which the club is likely to be confronted with. If a problem arises in a club, the first reaction of the committee2 or the members should be, ‘What do the rules say about it?’3 This does not mean to say that all sets of rules need to be complicated or minutely detailed. The extent of the rules depends on the extent of the club’s activities. As a general proposition, rules should deal with matters of substance, not matters of procedure. Matters of detail or procedure can often be best dealt with in byelaws or regulations if the need arises. It goes without saying that the rules should be expressed in clear and simple language, which does not need the training of a lawyer to expound what is the true meaning of any given rule.4 Rules (and byelaws) should always be dated so the members know when a particular rule or amendment came into force. 2.2 A paradigm of the need for well-drawn rules is the case of Royal Society for the Prevention of Cruelty to Animals v Attorney-General.5 The Society went to court to obtain guidance on whether its membership policy and associated membership scheme were constitutional. The Society was founded in 1824 as an unincorporated association but was incorporated by a private Act of Parliament in 1932. The rules governing its members were made in 1932 and amended or altered in 1964, 1976, 1979, 1983, 1991 and 1997. Their confused state drove Mr Justice Lightman to conclude his judgment by saying: 1

2 3

4 5

It is possible to have a set of enforceable oral rules but a club with such rules would be a very small coterie of like-minded persons. A literary, mid-twentieth-century example was the Inklings, a club consisting of CS Lewis (The Chronicles of Narnia), JRR Tolkien (The Lord of the Rings), Nevill Coghill (modern verse translator of Chaucer’s The Canterbury Tales) and Charles Williams of the Oxford University Press, who used to meet in CS Lewis’ rooms at Magdalen College, Oxford and in the Eagle and Child public house in Oxford. The nomenclature of a club’s managing committee in this book is dealt with at 5.1. In this chapter we will usually refer to the committee as ‘the Committee’. As long ago as 1836 in the case of Flemyng v Hector (1836) 2 M & W 172 (concerning the Westminster Reform Club) the courts were emphasising the importance of the club rules (Parke B at 184–185 and Alderson B at 187); Lyttelton v Blackburne (1876) 45 LJCh 219, at 222. See Megarry J’s comment in In Re Sick and Funeral Society of St John’s Sunday School, Golcar case [1973] Ch 51, at 61, ‘I have already observed that the rules are not well drafted, and I do not intend to explore all the difficulties discussed in argument’. [2002] 1 WLR 448.

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2.3  The Club’s Constitution or Rules ‘At the same time consideration should be given whether and how the rules should be amended generally so that they no longer represent a patchwork of amendments over the years with the inevitable construction difficulties to which such a patchwork gives rise and whether the society should adopt in their place a set of rules which are clear and consistent and enable it to function effectively.’

2.  The rule-makers 2.3 Members’ clubs It is the responsibility of the members to decide upon and enact the rules. This is the direct consequence of the fourth criterion (the need for a set of rules) and the sixth criterion (the need for collegiality) set out in 1.1. It is not uncommon, however, for the members to delegate some of their rule-making powers to a smaller group of members, such as delegation to the Committee to make bye-laws.6 2.4 We add that all clubs start out with the big advantage that candidates or applicants for membership must perforce join the club on its terms, not on their terms. If a candidate were to approach the secretary of the Basset Social Club and say, ‘I would like to apply for membership of your club but I don’t like the rule that says members must wear a red jacket in the clubhouse on Saturday evenings’, the secretary would no doubt respond, ‘In that case, don’t bother to apply’. It is only once the member has joined the club that he is in a position to get the rule altered and of course he may find the great majority of the members are in favour of the red jacket rule. 2.5 Proprietary clubs Here the responsibility for the rules lies solely with the proprietor who must, in particular, ensure that his rules comply with that part of the fourth criterion which states that the rules must fairly regulate the conduct of the members towards each other.

3.  Binding nature of the rules 2.6 The club rules are impliedly binding on each member as a matter of contract law.7 It can be, however, a wise precaution to state in every set of rules that on joining the club the member expressly agrees to be bound by the rules as may be made from time to time, and it should be a matter of standard practice to provide the new member with a copy of the rules.8 The importance of express rules is underlined by the fact that some further rules, however desirable, will

6 See 2.16. 7 In re Sick and Funeral Society of St John’s Sunday School, Golcar [1973] Ch 51, at 60. 8 This is not essential as may be seen from Raggett v Musgrave [1827] 2 Car & P 556 (where the rules were accessible but not posted in the clubhouse or sent to the members, yet were still held to be binding on the members). And see John v Rees [1970] 1 Ch 345, at 388 (where Megarry J said, ‘In the case of a club, if nobody can produce any evidence of a final resolution to adopt a particular set of rules, but on inquiry the officers would produce that set as being the rules upon which it is habitual for the club to act, then I do not think the member would be entitled to reject those rules merely because no resolution could be proved’).

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Contents of the rules 2.10 not be implied into club rules unless either they are necessary to give business efficacy to the contract of membership or because the implied term represents the obvious, but unexpressed, intention of the parties.9 As will be seen, such rules as those dealing with expulsion of members10 or amendment of the rules11 will not be implied into the rules in the absence of express rules to this effect. 2.7 Parliament, over a long period of time, starting with the Literary and Scientific Institutions Act in 1854, has enacted legislation for various types of club whereby the prescription of binding rules is a basic tenet of the organisation (see for example 2.34).It is only the unincorporated members’ clubs that have never had any direct statutory governance in relation to their constitution or rules (save compliance with the directions of the Licensing Acts from 1902 to 2003 as to their rules). 2.8 It is a common practice that the elected candidate is not entitled to the privileges of membership until he has paid the entrance fee (if any) and his first subscription. In this event the election constitutes an offer of membership so that on notification of his election the candidate can reject the offer and decline membership because the contract is only complete when he had paid the entrance fee and the first subscription.12 If there is no such practice the candidate’s application is the offer and the acceptance is the notification of election.

4.  Contents of the rules 2.9 Express rules At the most basic level, the rules of the club should make provision for: (1)

the name of the club;

(2)

the object and purposes of the club;

(3)

the election or admission of members;

(4)

the payment of subscriptions;

(5)

the resignation of members;

(6)

the suspension and expulsion of members;

(7)

the management of club affairs;

(8)

general meetings of the members;

(9)

the amendment of the rules;

(10) the dissolution of the club. 2.10 For a complex organisation which, say, has a national identity and branches and perhaps a disciplinary role as well, the rules will need to be a lot more comprehensive and make provision accordingly. For example, the index to the constitution or rules of such a club might comprise the following: 9 Chitty on Contracts (33rd edn, 2019) at 14-005. 10 See 7.10. 11 See 2.22. 12 Re New University Club (Duty on Estate) (1887) 18 QBD 720, at 727.

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2.10  The Club’s Constitution or Rules General (1)

name of the club;13

(2)

object and purposes of the club;14

(3)

charitable status [if any];15

(4)

powers [if, say, it has a royal charter];16

(5) patron;17 (6)

President and Vice-Presidents;18

(7)

other officers of the club;19

(8) trustees;20 Membership (9)

categories of member;21

(10) qualification for membership;22 (11) election of candidates;23 (12) privileges of membership;24 (13) entrance fee;25 (14) subscriptions;26 (15) resignation;27 (16) suspension and expulsion of members;28 (17) disciplinary proceedings;29 (18) restrictions on members;30 Management (19) management of the club’s affairs;31

13 See 2.12. 14 See 2.14. 15 See 1.43–1.47. 16 A royal charter stems from the royal prerogative (now exercised via the Privy Council) and was virtually the only way to create a corporate body before the advent of the Companies Acts. The charter will define the privileges and purposes of the body holding the charter. 17 See 5.4. 18 See 5.6. 19 See 5.7–5.12. 20 See 5.19. 21 See 4.6–4.16. 22 See 4.1–4.5 and 4.17–4.26. 23 See 4.1–4.5 and 4.17–4.26. 24 See 4.27. 25 See 4.28–4.35. 26 See 4.28–4.35. 27 See 7.2–7.7. 28 See 7.32–7.36 and 7.10–7.31 respectively. 29 See 7.71–7.41. 30 See 5.26. 31 See 5.1.

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Contents of the rules 2.10 (20) composition of the Council [the ruling body]; (21) meetings of the Council; (22) board of Management [the managing committee];32 (23) committees [sub-committees];33 (24) Secretary General [the Honorary Secretary];34 (25) branches;35 (26) Annual General Meeting;36 (27) special meetings;37 (28) notice to members;38 (29) procedure at general meetings;39 Financial provisions (30) power to borrow monies;40 (31) accounts;41 (32) auditor;42 (33) investment manager;43 Miscellaneous (34) bye-laws;44 (35) interpretation of the rules;45 (36) amendment of the rules;46 (37) dispute resolution;47 Dissolution (38) dissolution of the club;48 (39) assets on dissolution.49 32 See 5.21. For committee meetings, see 6.55–6.56. 33 See 5.24. 34 As to paid officials, see 5.10 and 5.11. 35 See 5.20. 36 See 6.2. 37 See 6.6–6.8. 38 See 6.10–6.19. 39 See 6.20–6.54. 40 See 5.49–5.55. 41 See 5.11–5.12. 42 See 5.18. 43 A smaller club would usually have an Honorary Treasurer, which office would form part of the Management section. 44 See 2.16. 45 See 2.17–2.21. 46 See 2.22–2.32. 47 See 5.90, 5.101–5.109 and 19.43–19.50. 48 See 3.1–3.2. 49 See 8.1.

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2.11  The Club’s Constitution or Rules 2.11 In deciding how detailed the rules should be or what special rules ought to be included, the members or their committee should think ahead as to what problems might arise in any particular area of the club’s activity. For example, the players in a football club might find themselves outnumbered by the social members of the club. The social members are welcome because they generate cash at the club as well as camaraderie. But what if a developer offers to buy the club’s playing field? The players are all against the offer but the social members are all in favour of it. The solution adopted by some sports clubs is to have a rule that states if any motion, which is put to the members at a general meeting, is prejudicial to the interests of the playing members, the non-playing members shall not be entitled to vote on it.50 The authors do not necessarily recommend any such rule but this example demonstrates the need for foresight when compiling rules. If the rule is not there when it is needed, it may be too late to insert it as an amendment.51 2.12 Name of the club The stated objects should be fairly reflected in the name of the club. In an unreported case, Re Claremont Liberal Club Limited (1910),52 registered under the Companies (Consolidation) Act  1908, the club applied in September 1910 to Mr Justice Swinfen Eady for sanction to extend its activities ‘to work mines, promote companies, underwrite shares, and sell coal and coke’. The judge refused permission on the ground that in order to carry out these activities the club would first have to change its name to a general purposes company. There is, however, in practice little restriction on the choice of name. With regard to community clubs the Financial Conduct Authority can refuse to register a name which in its opinion is undesirable.53 And with regard to company clubs the Secretary of State has the power to reject a name if he is of the opinion that it would constitute a criminal offence or is offensive.54 2.13 Certain guarantee companies and other private companies are entitled to omit the word ‘Limited’ from their name if: (1) it is a charity; or (2) it already has exemption because the objects of the company are the promotion of commerce, art, science, education, religion, charity or any profession, and provided (a) it requires its profits (if any) to be applied in promoting its objects, (b) no dividend is paid to its members, and (c) on winding up its assets are transferred to another body with similar objects rather than distributed to the members.55 2.14 Objects of the club A club’s objects clause should be stated in a suitably wide form to cover all the activities it may wish to pursue. This ensures that the club’s funds and assets are expended in a proper manner. Because circumstances change over the years and the club’s activities may take a new direction or have a new emphasis, a provision can be inserted in the objects clause which states that

50 Such a rule would not contravene the Equality Act 2010 because it would not involve any of the protected characteristics: see 5.71–5.81. 51 See In re West Sussex Constabulary’s Widows, Children and Benevolent (1930) Fund Trusts [1971] Ch 1, at 9. 52 Cited by BT Hall in his book on Club Law published in August 1915 by the Working Men’s Club & Institute Union. 53 Co-operative and Community Benefit Societies Act 2014, s  10(1). The FCA has published guidance on name restrictions for societies in its Finalised Guidance 15/12 of November 2015. 54 Companies Act 2006, s 53. Companies House has published guidance on name restrictions. 55 Companies Act 2006, ss 60–64 and the Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015, SI 2015/17.

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Interpretation of the rules 2.17 no one object is to predominate over another or the wording of the objects clause can be such that no one object prevails over another object.56 2.15 If the club’s object was stated to be the provision of facilities for the playing of golf, would it matter if the club started spending its funds on the provision of facilities for the playing of squash? The answer is that it would matter, because the expenditure would have been unauthorised; the club’s auditor might take exception to it and the committee who spent the money might be vulnerable to reimburse the club, unless all the members ratified the expenditure or unless the objects clause was amended with retrospective effect57 to include the playing of squash.58 Presumably in most cases the members would be aware of the expenditure on squash facilities and would be consenting to their committee spending the club’s money in this way, so that no problem would arise in fact, but it is plainly not good practice to have the objects clause and the club expenditure out of kilter. 2.16 Bye-laws and regulations Bye-laws (and regulations, which is a synonymous category) are a form of subordinate legislation. In club law they exist for the purpose of governing the details or minutiae of internal management and administration of a club where it is unnecessary to burden the main rules with such matters. In the case of a members’ club no term will be implied that the committee or the members in general meeting shall have power to make bye-laws unless, which is unlikely to occur in practice, all the members have consented to this course.59 Therefore there must be express power in the rules to make bye-laws. An exception is a club to which the Literary and Scientific Institutions Act 1854 applies.60 It is usual to give the power of making bye-laws to the managing committee; this has the advantage that they may be amended or altered as the circumstances require by the committee itself rather than by the more cumbersome procedure of amendment by the members in general meeting. The enabling rule should state for what purpose or purposes the bye-laws may be made. Bye-laws must be consistent with the main rules, and they should not contain matters of principle which usurp the function of the main rules. Nor must they be unduly oppressive of any minority of the club.61 In order to ensure that bye-laws are sufficiently brought to the attention of the members, it is a good practice to provide each member with a copy.

5.  Interpretation of the rules 2.17 Gender rule Nowadays most clubs are open to members of both sexes. It is sometimes said that the greatest contribution ‘this sceptred isle’62 has made to civilisation is the English language. Yet we have no pronoun or adjective which

56 See 2.28 for an example of the advantage of a suitably wide objects clause. 57 As to retrospective amendment of the rules, see 2.31. 58 See Baker v Jones [1954] 1  WLR  1005 (where the payments made by British Amateur Weightlifters’ Association to solicitors to defend libel actions brought against some of its members were held illegal because there was no power in the rules to use the funds in this manner). 59 The exception is based on the premise that, if all consent, the members’ contract with each other will have been lawfully varied. 60 See 2.34. 61 Merrifield Ziegler & Co v Liverpool Cotton Association [1911] 105 LT 97, at 104. 62 The country so described by John of Gaunt in The Tragedy of King Richard II (Act 2, scene 1).

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2.18  The Club’s Constitution or Rules denotes a man or a woman. We are faced with ‘he’, ‘him’ and ‘his’ on the one hand and ‘she’, ‘her’ and ‘hers’ on the other hand. Rule-makers can get round this problem by referring to members, officers, and guests etc in the plural and thus using the words ‘they’, ‘them’ and ‘their’, which includes both sexes, but the use of the plural is not always appropriate. Section  6 of the Interpretation Act  1978 states that, unless the contrary intention appears, words importing the masculine gender include the feminine, but this law is not common knowledge so it is better to have an express rule to this effect. In this book we ask the reader to make the same inclusion where we refer to the male gender in the text. 2.18 Implied rules Many sets of club rules are drawn up informally and the members are content to express only the most important rules of membership, leaving the remaining details to be tacitly understood or worked out later. Subsequently, a problem or unexpected contingency occurs which reveals a deficiency in the rules. The question which then arises is whether the law will imply a term or terms to cover the deficiency. It is well settled that, generally speaking, the court will only imply a term in two situations: (1) to give business efficacy to the contract; and (2) to give force to the obvious but unexpressed intention of the parties to the contract.63 Thus the club rules might stipulate that the member was to pay an annual subscription but omit to say when that subscription was due and payable. It would be easy in these circumstances to imply a term that the subscription was payable within a reasonable time of its being demanded. Similarly, it is unusual for the rules to say that the member shall behave in a proper and acceptable manner in the clubhouse but this obligation would be implied because it obviously represents the unexpressed intention of himself and his fellow members. 2.19 Customary rules On occasion a rule may be implied by custom or long usage by the members. The authors know of a case concerning a British Legion club where the club rules stipulated that in committee meetings the votes of abstainers were to be taken into account in calculating the requisite voting majority in favour.64 As an unwritten exception established over many years, where the committee held an expulsion meeting the chairman always abstained on the expulsion motion (to demonstrate his independent role) and his vote was discounted when calculating the necessary two-thirds majority. This unwritten rule had the backing of the club’s umbrella organisation.65 On one particular occasion the expulsion motion would have been defeated had the chairman’s non-vote been counted as an abstention rather than discounted altogether. The club declared that the member had been duly expelled and we consider that the club probably came to the correct decision because the club was relying on a valid customary rule. It is important to note, however, that the customary rule must be notorious, certain and reasonable66 and can only be incorporated into a contract provided that there is nothing in the express or necessarily implied terms to prevent such inclusion.67 The hypothetical ‘red jacket’ rule referred to in 2.4 could, we surmise, be the subject of a customary rule.

63 See Chitty on Contracts (33rd edn, 2019) Chapter 14. 64 See further 6.44. 65 See 1.67 as to umbrella organisations. 66 Devonald v Rosser & Sons [1906] 2 KB 728, at 743 and see Garratt v Mirror Group Newspapers Ltd [2011] EWCA Civ 425, at [45]–[47]. 67 London Export Corporation v Jubilee Coffee Roasting Co Ltd [1958] 1 WLR 661, at 675.

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Amendment of the rules 2.22 2.20 ‘Play in the joints’ As to the manner in which club rules should be approached, in 1881 in Dawkins v Antrobus68 Jessel MR said that the ordinary rules of construction were to apply as with any other contract. However, a hundred years later in 1982 the courts saw club rules in a different light. In Re GKN Nuts & Bolts Ltd Sports and Social Club69 Megarry V-C said:70 ‘In [club] cases the court usually has to take a broad sword to the problems, and eschew an unduly meticulous examination of the rules and resolutions. I  am not, of course, saying these should be ignored; but usually there is a considerable degree of informality in the conduct of the affairs of such clubs, and I think that the courts have to be ready to allow general concepts of reasonableness, fairness and common sense to be given more than their usual weight when confronted by claims to the contrary which appear to be based on any strict interpretation and rigid application of the letter of the rules. In other words, allowance must be made for some play in the joints.’ This allowance for ‘some play in the joints’ is also reflected in the modern interpretation of contracts by the courts. The surrounding circumstances in the making of the contract and its commercial common sense now play their part in its interpretation,71 which has also been held to apply to the rules of a club.72 But a word of caution should be added. In the GKN case the Vice Chancellor emphasised at 783 the need for ‘scrupulous observance of the rules’ when it came to changing the property rights of members. The same scrupulous observance of the rules will be required when it comes to a question of suspension or expulsion of the member.73 In addition, all rules must be construed in the context of the club’s objects clause. 2.21 Dispute as to its meaning It is in order for a club rule to state that if there is any dispute about the meaning or interpretation of a rule, it shall be put to the committee for a ruling thereon. What the rule cannot go on to say is that the committee’s decision is final with no recourse to the courts because this ouster of the court’s jurisdiction is contrary to public policy and void.74

6.  Amendment of the rules 2.22 Basic rule It is of cardinal importance that the rules contain an express provision whereby the members are empowered to amend the club’s rules (and bye-laws) by way of alteration, addition or revocation because when a member 68 [1881] 17 Ch D 615, at 621. 69 [1982] 1 WLR 774, at 776. 70 Dictum applied in Hunt v McLaren [2006]  EWHC  2386 (Ch), at [127] (Collins J) re the Horsley Football Club. 71 Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] 2 WLR 945, HL (Lord Hoffmann); Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 (Lord Hoffmann); Rainy Sky SA v Kookmin Bank [2011] UKSC 50 (Lord Clarke); but see Arnold v Britton [2015] UKSC 36, at [14]–[23] where the Supreme Court via Lord Neuburger set out seven factors putting limits on the ‘common sense approach’ to contractual interpretation (Lord Carnwath dissenting). 72 Hardy v Hoade [2017] EWHC 2476 (Ch), at [24]–[33] (Judge Edward Pepperall QC). 73 See 7.10. 74 Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329, CA, at 342 (Denning LJ); Baker v Jones [1954] 1 WLR 1005, at 1010. Such a rule would also offend against article 6(1) of the European Convention on Human Rights (the Human Rights Act 1998 incorporated this convention into UK domestic law).

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2.23  The Club’s Constitution or Rules joins the club he does so on the terms of a contract set out in the rules at that point in time and such a contract cannot be subsequently varied without the consent of all the members.75 No power to amend the rules will be implied into the contract. In Harington v Sendall76 a member of the Oxford and Cambridge University Club, an unincorporated members’ club, agreed to be bound by ‘the following rules and regulations’. The club wished to raise its subscription rule from 8 guineas to 9 guineas and Mr Harington as a member objected. The court rejected the club’s argument that as a social club it could not carry on at all unless there was an implied power to amend the rules as the necessities of the club might demand. The court also rejected the club’s argument that Mr Harington had acquiesced in the rule change because he had never objected to other rule changes in the past. The case provides several object lessons: first, by a slight alteration in the language of the rules Mr Harington would have been bound by amendments of the rules in that they could have said that the member was bound by the rules ‘as may be made from time to time’. Secondly, it is unwise to stipulate the amount of the subscription in the rule itself instead of adopting some general phrase such as ‘the amount as may be determined by the members in a general meeting’. Thirdly, acquiescence may be difficult to prove. 2.23 On this last point, however, there may be occasions when acquiescence may be inferred from a lack of opposition or objection to the new rule. In Abbatt v Treasury Solicitor,77 the unincorporated British Legion Club in 1954 affiliated to a different umbrella organisation,78 the Working Men’s Club and Institute Union; changed its name to the Old Castle Club; adopted a new set of rules; registered under the Friendly Societies Act 1896; and conveyed its property to new trustees. In 1960 the club sold part of its land and the purchasers raised a query as to title. Here the Court of Appeal held on the facts that although the rules of the old club contained no express power to amend or alter them the members as a body had acquiesced in the rule changes, so that the new club was the same as the old one but ‘dressed in different clothes’. In the course of his judgment at 1583 Lord Denning MR stated: ‘It is true that the old rules contained no express power to amend or alter them. But I should have thought it was implied that the members could, on notice, by a simple majority in general meeting, amend or alter the rules. In any event, however, if at such a meeting a majority purport to amend or alter the rules, and the others take no objection to it, but instead by their conduct acquiesce in the change, then those rules become binding on all.’

75 See Dawkins v Antrobus (1881) 17 Ch D 615, CA, at 621 (Jessel MR); Harington v Sendall [1903] 1  Ch  921, at 927 (Joyce J); and Re Tobacco Trade Benevolent Association [1958] 3 All ER 353 where Harman J stated, at 355, ‘This body [an unincorporated charity] started with no power to alter its rules, and such a body cannot alter its rules by its own motion except possibly by the concurrence of every member of the body’ (emphasis added). 76 [1903] 1 Ch 921. 77 [1969] 1 WLR 1575, CA. 78 See 1.67 as to umbrella organisations.

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Amendment of the rules 2.26 It may be doubted, however, whether Lord Denning’s first proposition as to the implied power of amendment accurately sets out the law in the light of clear authority contrary to this proposition.79 2.24 Since 190280 any club which supplies intoxicating liquor to its members or their guests has been required to register under the Licensing Acts, and in each case until the coming into operation in 2005 of the Licensing Act 2003 the club had to state the mode of altering its rules,81 so that the power to amend the rules is now a commonplace feature of club rules. There is no such requirement under the Licensing Act 2003; maybe the government thought that the provision of rules which included a power to amend was such an obvious fact of life for clubs that it no longer needed to spell it out expressly in the legislation. Nevertheless, if say an important constitutional change was required by a large majority of members, it would be a serious matter if there were no power of amendment contained in the rules and the club were unable to remedy the situation save by unanimous consent or by acquiescence. This is because the ultimate remedy would be either to pass by the requisite majority a resolution to dissolve the club and distribute the assets or for the majority to resign en masse from the club in order to form a new one. This latter remedy will mean abandoning the existing club’s assets to the minority of members who objected or abstained on the vote to bring about the important constitutional change, and this abandonment might be an unacceptable solution to many members. 2.25 Amendment of a fundamental rule The question arises whether a rule is so important or fundamental to the objects or nature of the club that it may not be subsequently altered without dissolving the club. The answer depends on the reaction of the members to such a rule change. There are three possible scenarios: (1)

all members agree to the change. There is no difficulty here as a new contract of membership will have been created;

(2) the dissenting member or members all resign.82 This leaves the remaining membership free to operate under the rule change; (3) the club may have to be dissolved. Suppose the Basset Dining Club was restricted to 25 male members whose raison d’être was the enjoyment of convivial small dinners with cigars and brandy. If there was a rule change whereby the membership was open to women or the membership limit was increased to 100, the only workable or fair solution might be to dissolve the club. 2.26 The question which has to be addressed is what constitutes a fundamental rule. This is a question of fact in each case. So the example given in 2.25(3) might not in every circumstance amount to a change to a fundamental rule. Increasing the membership of the Basset Hockey Club from 25 to 100 or the enlargement of the membership to include women players as well as men players would be unlikely 79 See the cases cited in footnote 75 above. On the other hand, Lord Denning’s proposition re acquiescence casts serious doubt on the Tobacco Trade case where, at 355, Mr Justice Harman in 1958 declined to infer acquiescence of a purported alteration of the rules which had taken place in 1871 and had not been objected to since that date. 80 See Licensing Act 1902, s 24. 81 Licensing Act 1964, s 48. 82 As to the resigning member’s unexpired subscription in this situation, see 4.35.

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2.27  The Club’s Constitution or Rules to be accepted by the court as a change to a fundamental rule since the essence of a hockey club would be the provision of playing facilities for an indeterminate number of players of either sex who wished to participate in the sport. In Morgan v Driscoll83 the plaintiff was a priest who was a member of an unincorporated association known as the Secular Catholic Clergy Common Fund. Under its rules of 1861 an incapacitated member had an absolute right to an allowance from the fund. In 1918, under a rule permitting amendment, the association amended its rules to make the allowance discretionary. Mr Justice Sargent upheld the amendment as valid on the ground that it ‘did not go to the foundation of the association and was not incompatible with the fundamental object of the association’ which was to give financial aid to incapacitated clergymen. In Doyle v White City Stadium84 Lord Hanworth  MR concurred with this proposition and gave as an example of incompatibility an alteration of the rules whereby a society connected with boxing turned itself into a society for conducting horse-racing. 2.27 The next question which arises is whether a duly passed alteration to a fundamental rule actually binds those members who objected to it. The answer here is in the negative if it can be reasonably considered that the parties would not have contemplated any such alteration when the member joined the club. In Hole v Garnsey85 the case concerned the liquidation of a society registered under the Industrial and Provident Societies Act 1893 and called the Wilts and Somerset Farmers Limited. The object of the society was to dispose of agricultural and dairy produce produced by its members. The rules contained a power of amendment (Rule 64) and a duly passed amendment required the members to take additional shares. The House of Lords held that the amended rule was not effective against members who had not assented to it. Lord Tomlin in his speech, at 500, stated: ‘Does a power enabling a majority86 to amend the rules justify as against a dissenting member any alteration whatever, where, as here, neither by the statute87 nor by the rules themselves is any one rule expressed to be more fundamental and unalterable than any other? The answer in my judgement must be in the negative. In construing such a power as this, it must, I think, be confined to such amendments as can be reasonably considered to have been within the contemplation of the parties when the contract was made, having regard to the nature and circumstances of the contract. I do not base this conclusion upon any narrow construction of the word “amend” in Rule 64, but upon a broad general principle applicable to all such powers. If no such principle existed I see no reason why a dairy society in Wiltshire should not by the means of the exercise of [an amending] power find itself converted into a boot manufacturing society in Leicester with an obligation on the members to contribute funds to the new enterprise.’88

83 (1922) 38 TLR 251. 84 [1935] 1 KB 110, CA, at 121. 85 [1930] AC 472. 86 In this instance a three-fourths majority. 87 In this instance the Industrial and Provident Societies Act 1893. 88 This dictum was followed in Lord Napier and Ettrick v RF Kershaw Ltd [1997] LRLR 1, at [6] (Nourse LJ) and in IMG Pension Plan HR Trustees v German [2009] EWHC 2785 (Ch), at [117] (Arnold J). And see PNPF Trust Co Ltd v Taylor [2010] EWHC 1573 (Ch), at [136] (Warren J) for a further review of Hole v Garnsey.

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Amendment of the rules 2.31 2.28 But against this principle it should be remembered that, as Lord Sumner remarked at 491 in the case of Hole v Garnsey, the courts have gone far to support the autonomy of social clubs and their power to affect members by rules and regulations, passed regularly and in good faith. A  striking example of this is the case of Thelusson v Viscount Valentia.89 The Hurlingham Club was formed in 1868 with a power to amend the rules. The objects in Rule 2 read as follows: ‘The club is instituted for the purpose of providing a ground for pigeon-shooting, polo, and other sports’. From inception pigeon-shooting was carried on at the club, prizes being given and competitions arranged by the committee. Polo and other sports had been carried on for a shorter period. The membership itself was divided into shooting and non-shooting members. In 1905 the majority of members duly passed a resolution discontinuing the sport of pigeon-shooting at the club, and a minority of members brought an action against the committee for a declaration that the resolution was null and void. The action failed because no particular sport was fundamental to the existence of the club, it being successfully argued by the club that its fundamental purpose was the association of its members for sporting activities. 2.29 Acquiescence in the change Can a person remain a member of a club if he had in no way accepted a rule change which fundamentally altered the terms of his contract of membership? Let us take Lord Hanworth’s example of a boxing club which by a duly passed amendment of the rules turned itself into a horseracing society. Leaving aside the question of dissolution,90 we consider that the answer lies in the member’s election. He can either elect to resign or he can elect to remain a member.91 If he chooses the latter course, he will have irrevocably acquiesced in the rule change, which will thus become binding on him. Payment of his next subscription would be conclusive evidence of his election to remain a member. What a member cannot do is to remain a member and simply assert that he was not bound by the fundamental alteration to the rule which he disagreed with. 2.30 Once a rule has been validly amended or acquiesced in, it is binding on all the members, old and new, whether or not they voted against the amendment or took no part in the voting.92 The fact that a duly passed alteration of the rules has not come to the member’s attention or that he had received no actual notice of the amendment does not affect the validity of the rule.93 2.31 Retrospective amendment The question is sometimes asked whether the rules can be altered retrospectively. In Dawkins v Antrobus94 Colonel Dawkins, a member of the Travellers Club, an unincorporated members’ club, put a pamphlet about General Stephenson, another member of the club and a serving officer, in a wrapper endorsed on the outside ‘Dishonourable conduct of Colonel (now Lieutenant-General) Stephenson’ and sent it by post to his official address at the Horse Guards. For that conduct he was expelled from the club under an expulsion rule which existed at the time of the alleged misconduct but not when he had

89 [1907] 2 Ch 1, CA. 90 See 2.25(3). 91 Farnworth Finance Facilities v Attryde [1970] 1 WLR 1053, CA, at 1059 (Lord Denning MR). 92 Burke v Amalgamated Society of Dyers [1906] 2 KB 583, at 591 (Lawrence LJ). 93 Doyle v White City Stadium [1935] 1 KB 110, CA, at 122 and 134. However, giving proper notice of the general meeting, at which the rule alteration is to be considered, is essential: see 6.10–6.19. 94 (1881) 17 Ch D 615, CA.

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2.32  The Club’s Constitution or Rules joined the club and the court held that Colonel Dawkins was bound by the inserted rule. Lord Justice Brett, at 632, commented that an expulsion rule could have no retrospective effect and this proposition is readily understandable both generally and in the context of that case. But whether all retrospective alterations are invalid is a different matter. We consider that in principle there is nothing objectionable in a retrospective rule provided that it is made by the members acting bona fide in the interests of the club as a whole. There is a presumption in statute law that legislation is not retrospective or retroactive, especially in relation to vested rights and obligations,95 and a similar presumption should be made in club rules so that the occasions on which a retrospective rule would be appropriate are few and far between.96 2.32 Amendment procedure It is good practice to state in the power to amend that any resolution to amend the rules shall either be the subject of a special meeting called specifically for that purpose or, if raised at the annual general meeting, the subject of a notice in writing of the proposed resolution given by the member at least 14 days prior to the holding of the AGM. It is to be noted that a rule which stipulates that an AGM is to be held ‘for general purposes’ does not encompass any power to alter or amend the rules of the club.97 It is also good practice to state in the power to amend that the resolution to amend the rules shall be carried by substantially more than a simple majority of the members present and entitled to vote at the meeting, say by a two-thirds majority.98 If there is no such stipulation in the rules, it is considered that the resolution will be capable of being passed on a simple majority,99 and this is perceived to be unsuitable because the rules should not be altered lightly and a substantial majority demonstrates that the amendment commands proper support in the club.

7.  Statutory involvement: members’ clubs 2.33 All the members’ clubs discussed in this book, save unincorporated members’ clubs, are involved with statutes in constitutional matters. The following paragraphs summarise their constitutional aspects. 2.34

Literary and scientific institution

(1)

Constitution Under the Literary and Scientific Institutions Act 1854, section 33 states to whom the Act shall apply; section 32 defines the governing body; and section 24 empowers the governing body to make bye-laws for the better governance of the institution.

(2)

Objects The club must state in its rules that its objects are the promotion of science, literature, for fine arts, for adult education, the diffusion of useful knowledge or maintenance of public libraries or reading rooms for the general

95 See Wilson v First County Trust (No  2) [2003] 3  WLR  568,  HL, especially the speech of Lord Rodger of Earlsferry at 618. 96 See the hypothetical example given in 2.15. 97 Harington v Sendall [1903] 1 Ch 921, at 926. 98 For example, s 4(2) of the Credit Unions Act 1979 stipulates that the rules of a credit union may not be amended except by a resolution passed by not less than two-thirds of the members present at a special meeting. 99 See further 6.36–6.48.

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Statutory involvement: members’ clubs 2.37 public, plus public museums, galleries of paintings, collections of natural history, mechanical and philosophical inventions, instruments or designs.100 (3) 2.35

Amendment See the Act of 1854, section 27.

Working men’s club

(1)

Constitution Under the Friendly Societies Act  1974, section 7(2) stipulates that the rules must contain those rules set out in Schedule 2 to the Act.101

(2)

Objects The club must state in its rules the whole of the objects for which the club is established and the purposes for which the club’s funds are to be applicable.102

(3)

Amendment See the Act of 1974, section 7(2) and Schedule 2, paragraph 4.

2.36

Community club

(1)

Constitution Under the Co-operative and Community Benefit Societies Act 2014, section 14 stipulates that the rules must contain provisions dealing with the matters listed in the section.103

(2)

Objects The club must state in its rules what its objects are.104 There is no requirement to state in the rules the whole of the objects for which the club is established, as obtains in the case of clubs registered under the Friendly Societies Act. Thus the objects clause of the club can be drawn in a suitably wide form.

(3)

Amendment See the Act of 2014, section 14(5).

2.37 (1)

Company club Constitution The rules (articles) of these clubs currently emanate from the Companies Act 2006. Prior to 1  October 2009 companies were required to have as their constitutional documents an old-style memorandum of association and some articles of association,105 often referred to simply as the memorandum and the articles. For companies incorporated after this date the new-style memorandum has become a formal document recording its position at the point of registration of the company and nothing else.106 The articles of association must be contained in a single document.107 Successive Companies Acts have balanced the company’s freedom to make its own articles with the convenience of providing standardised model articles set out in the legislation so that, as one commentator put it, companies do not have to re-invent the wheel. No company is obliged to adopt the model articles; a company may adopt some or all of the model articles108 and, if it wants, the articles can entirely comprise bespoke rules but in this event it would be wise for the company to seek legal advice.

100 Literary and Scientific Institutions Act 1854, s 33: see Appendix A. 101 See Appendix D. 102 Friendly Societies Act 1974, Sch 2, para 3(1). 103 See Appendix E. 104 Co-operative and Community Benefit Societies Act 2014, s 14(2). 105 Companies Act 1985, ss 1(1) and 7(1). 106 Companies Act 2006, s 8(1). 107 Ibid, s 18(3)(a). 108 Ibid, s 19(3).

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2.37  The Club’s Constitution or Rules The articles of association are the company’s internal rulebook and are legally binding on the company and its members.109 The articles are chosen by the members and comprise a form of statutory contract between the company and the members in relation to their membership of the company.110 But it must be clearly understood that these articles are not the same thing as the club’s rulebook, although the two will of necessity overlap.111 Therefore the club rules should always be set out in a separate and self-contained rulebook which will be binding on the members as a matter of contract law in relation to their membership of the club. If, however, there were to be any conflict between the articles and the club rules, the articles would prevail since they have statutory force under the Companies Acts. This rulebook can be authorised by the directors under the articles: see for example article 5 of the 2008 Model Articles where the directors can make provision for delegation of their powers of management to committees and the members. Having a separate club rulebook means that the domestic arrangements of the club can be dealt with flexibly and at little expense, especially if the rules contain a power of amendment to be exercised by the managing committee of the club.112 The model articles issued under the Companies Act  2006 respectively for private companies limited by shares and companies limited by guarantee, viz the 2008 Model Articles, came into force on 1 October 2009.113 A company formed after this date can rely on the 2008 Model Articles without more ado. In this case the company does not need to register its articles at Companies House since these model articles will apply by default.114 (2)

Objects Unless the articles specifically restrict the objects of the company its objects are now unrestricted.115 Accordingly, for clubs incorporated on or after 1 October 2009 it is essential for the club’s objects to be defined in the company’s articles, otherwise the first criterion (the need for an agreed and common purpose)116 will not be met. The old-style memorandum was the place to entrench elements of the constitution. Section 22 of the Companies Act 2006 introduced a new entrenchment scheme, not yet fully in force. However, the unanimous agreement of the members, like a court order, can effectively extend the life of the company’s articles under section 22(3). The registrar of companies must be notified of the introduction or removal of an entrenched provision.

(3) Amendment See Companies Act 2006, section 21.

109 Companies Act 2006, s 33(1). 110 Globalink Telecommunications Ltd v Wilmbury Ltd [2003] 1 BCLC 145, at 154. 111 Josling and Alexander, The Law of Clubs (6th edn, 1987), at p 21. 112 An alternative route, sometimes adopted if there is no separate club rule book, is to exclude the club rules from the articles and to deal with them under the company’s bye-laws, such bye-laws being authorised by and promulgated under the articles and thereafter being amended as and when necessary by the directors. 113 Companies Act  2006, s  19(1), (2); Companies (Model Articles) Regulations  2008, SI 2008/3229: see Appendices G and H. 114 Ibid, s 20(1)(a). 115 Ibid, s 31(1). Under the earlier Companies Acts the memorandum had accurately to specify the objects of the company: 116 See 1.1.

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Statutory involvement: members’ clubs 2.39 2.38

Community interest company

(1) Constitution The club has to comply with the requirements of section 6 of the Companies Act 2006, some parts of the Companies (Audit Investigation and Community Enterprise) Act 2004 (‘Enterprise Act 2004’)117 and the Community Interest Company Regulations 2005118 (as amended) by setting out in the company’s articles the particular provisions required of a community interest company.119 Key provisions which must be included in the CIC’s articles (a) limit the interest payable on loans made to it, (b) restrict the remuneration of its managers, and (c) limit the amount of any distribution of dividend to shareholders. In addition, any amendment of the company’s objects must be approved by the Regulator of Community Interest Companies. The articles will, so to speak, also count as the club’s rulebook for the members of the company. (2)

Objects Article  5 of the articles of association offered by the Regulator of the Community Interest Companies states as follows, ‘The objects of the Company are to carry on activities which benefit the community and in particular (without limitation) to [the identified activity]’.

(3)

Amendment Any alteration under section 21 of the Companies Act 2006 to the objects stated in the company’s articles of association of the Companies Act 2006 must be approved by the Regulator of the Community Interest Companies.

2.39 (1)

Charitable incorporated organisation Constitution The CIO may encompass other clubs by statutory conversion (see 1.24 and 1.42) as well as the formation of a club described as an Association model (see 1.45). All these clubs have to comply with the requirements of the Charitable Incorporated Organisations (General) Regulations 2012.120 The CIO’s constitution must follow the published model, but with some small amount of permitted flexibility.121 Some words of caution are needed here. The ‘Association’ model published by the Charity Commissioners in 2016 refers to a corporate body which is entitled to be admitted as a new member under Clause 9(1)(a). The adoption of this clause would automatically disqualify the Association model from being a club as defined in 1.1(1) whereby its members must be natural persons.122 It should also be noted that the optional clause 9(6)(a), which permits the charity trustees to create associate or other classes of nonelected membership, offends the criterion in 1.1(5) whereby there should be a defined process of admission of members as operated by the elected members.

117 See, in particular, ss 7–10 and Schs 1–3. 118 SI  2005/1788, reg  13. Amended by the Community Interest Company (Amendment) Regulations 2014, SI 2014/2483. 119 Companies Act 2006, s 6 and Enterprise Act 2004 s 32. The website of the Regulator of Community Interest Companies offers a range of constitutions suitable for CICs, of which the one offered for a CIC limited by guarantee with a large membership is probably the most suitable for clubs. 120 SI 2012/3012. 121 See the Charity Commission’s Guide, published 30  May 2014 and updated 4 November 2014. 122 Clause 12(2)(a) of the model Association rules requires its trustees to be natural persons.

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2.40  The Club’s Constitution or Rules (2)

Objects These must be exclusively charitable, must include the purpose(s) for which the CIO is being established and must identify the people who can benefit.

(3)

Amendment See Charities Act 2011, sections 224–227.

2.40

Community amateur sports club

(1)

Constitution The CASC is a club entitled to be registered by the tax authorities as a community amateur sports club if it is open to the whole community and is organised on an amateur basis.123

(2)

Objects Its main purpose is the provision of facilities for and the promotion of eligible sports.124

(3)

Amendment The procedure for amending the rules of the CASC will be as set out in 2.22–2.39 above, depending on the legal structure it uses, either as an unincorporated members’ club or as a company club. If the amendment means that the club’s rules no longer meet the HMRC requirements for CASC status, the club will lose its CASC status and its tax benefits. That could be because no longer (a) is it open to the whole community or (b) organised on an amateur basis or (c) has as its main purpose the provision of facilities for, or the promotion of, participation in an eligible sport; or because it fails to meet either the management or the location conditions.125 For this reason it is wise to check with HMRC any proposed rule amendments that may have such an effect before they are put to the membership for approval.

8.  Proprietary clubs 2.41 Objects clause The objects clause will be drafted by the proprietor and, insofar as the assets and funds of the club belong to the proprietor, the objects clause is of less significance than in a members’ club. Nevertheless, a proprietary club should concisely state what are the objects of the club so that the members are aware of the nature of the club they are applying to join. 2.42 Rule book The proprietor will set out the club rules as part of the contract between himself and the individual club member and these rules will bind the member as a matter of contract law. If the proprietary club is incorporated, it is likely that few of the members will have ready access to the company’s memorandum and articles of association, so that it becomes all the more important that the rules are set out in a separate and self-contained rulebook. It is also a sensible practice for the rules to recite the proprietor’s obligation to provide the members with facilities, and premises if applicable, at his own expense without liability on the part of the member save as to the subscription and other agreed charges. 2.43 Amendment of the rules If a proprietor is running a members’ club, it is wise for him to insert in the club’s rules a power to amend the rules because this avoids any argument as to precisely what powers of amendment the club and 123 Corporation Tax Act 2010, ss 658, 659 and 660. 124 Ibid, ss 660A and 661. 125 See 1.47–1.58 and HMRC, Community Amateur Sports Clubs: detailed guidance, updated to 24 March 2020, available on the gov.uk website.

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Proprietary clubs 2.43 he respectively have at their disposal. The scope of the amending rule depends on the level of control he has chosen to exercise over the club. Many proprietors retain the sole right to amend the rules. A proprietor is entitled to and usually does offer membership on an annual basis so that on renewal he has the opportunity to amend the rules more to his liking since any contract he makes will be with each individual member, who is free to choose whether to accept or reject the offer of a new contract. We consider, however, that the proprietor could not have different rules for members of the same class since this would not be consistent with the fourth criterion (the need for fair rules) and the sixth criterion (the need for collegiality) referred to in 1.1.

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Chapter 3

Dissolution of the Club

1. Introduction 3.1 It is a matter of concern that many clubs do not have adequate rules when it comes to dissolution of the club; this is especially so in unincorporated members’ clubs. One does not need to look far for the reason, however. The rules are drafted at the beginning of the club’s life, when dissolution is not on the agenda. Nobody has thoughts of dissolution and the topic is often dismissed as irrelevant. But the fact of the matter is that proper provision in the rules dealing with dissolution is both practical and sensible and will avoid a potentially acrimonious or disastrous end to the club’s life. 3.2 At the outset the rule makers need to ask themselves not only what problems they might envisage on the forced demise of the club on the grounds, say, of lack of money or lack of members but what outcome they would desire if the club were dissolved when fully solvent and in possession or ownership of valuable property or assets. Express rules dealing with the event of dissolution are a far better solution than letting the general law of the land provide the answer in their absence. For example, in the case of Abbatt v Treasury Solicitor,1 already referred to in 2.23, the trustees of the new club contracted in 1960 to sell part of the land ‘inherited’ from the old club in 1954 for the sum of £300. The purchaser raised a query as to title. Who owned this land? It had belonged to the members of the old club but that club no longer existed. Did the members of the new club own it? No, said the judge, it belonged to the members of the old club who were members at the date of dissolution in 1954. Yes, said the appeal court, overruling the judge. The case involved four separate parties, namely, the trustees of the new club, the trustees of the old club, a representative of the members of the old club and the treasury solicitor, and outings in three different courts.2 One of the options open to the court was to hold that the Crown owned the land as bona vacantia (that is, goods that were otherwise ownerless),3 so that no member either of the old club

1 2 3

[1969] 1 WLR 1575, CA. Ie proceedings in the Andover County Court, the High Court of Justice and the Court of Appeal. See the headnote at 1575; In re Trusts of the Brighton Cycling and Angling Club (1953) Times, 19 April, CA (the assets of a club which had ceased to exist were declared bona vacantia to which the Crown was entitled).

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3.3  Dissolution of the Club or the new club owned the land, this being a worst-case scenario. The case vividly demonstrates the need for a proper rule on dissolution in every set of club rules.4

2.  Amalgamation of clubs 3.3 Overview The amalgamation of clubs is a mild form of dissolution in that the original clubs will cease to exist but are in fact given a further lease of life by the inception of the amalgamated club, which would be a new entity, whether it be unincorporated or incorporated. We mention merger, which is a different concept. In the commercial world merger is where a smaller company is absorbed by a bigger company which keeps its identity, whereas amalgamation is where two companies of comparable size or status lose their identities and a new company is formed. In the world of clubs, amalgamation would be the more common process, and both the Friendly Societies Acts and the Cooperative and Community Benefit Societies Act 2014 talk about amalgamation. We use the word ‘amalgamation’ in this section to include both aspects unless otherwise stated. The difficulties which can arise here are not ones of principle but ones of practicality and, if governed by statute, due care must be taken in conducting the amalgamation process. 3.4 Unincorporated members’ clubs It is recommended that the two clubs jointly draw up a document headed ‘Amalgamation principles’ which sets out the basis of the proposed amalgamation. Then each club should simultaneously but separately hold a dissolution meeting at which it will be resolved: (1) by the requisite majority under each club’s rules (eg  a simple majority of those present at the meeting) that the club shall forthwith amalgamate with the other club; and (2) by the requisite majority under each club’s rules (eg  two-thirds of the members entitled to vote) that, provided the other club passes an identical resolution to amalgamate, the present club be dissolved on a date to be agreed by the committee of the new club. It is important that the resolutions are taken in the order and in the form indicated in case the other club is unwilling or unable to pass the same resolutions. If both clubs pass the two resolutions as anticipated, the two dissolution meetings should immediately be followed by a joint meeting at which the motion will be put that the amalgamated club should forthwith be formed. If passed, the next item on the agenda will be the date for the inaugural meeting of the new club in order to put in hand the election of officers and members of the committee. 3.5 It is obviously desirable that the rules of the new club be placed before the joint meeting and a resolution passed that they be adopted but this may not be possible because of the need for discussion, or further discussion, as to the form they will take or the two sets of existing rules may still need reconciliation on certain points. This does not matter because in the meantime the two existing clubs will continue to exist until such time as the new rules are agreed by the members, at which point in time the new committee can decide to dissolve the old clubs. The date of this dissolution can be taken as the legal date of birth of the new club.

4

Other good examples of the need for dissolution rules are In re Sick and Funeral Society of St John’s Sunday School, Golcar [1973] 1 Ch 51 (see 7.4) and Boyle v Collins [2004] EWHC 271 (Ch) (see footnote 44).

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Amalgamation of clubs 3.11 3.6 If the members of the new club wish it to be a community club or a company club, it is best for the two unincorporated members’ clubs first to amalgamate and then to put in hand the process of conversion. Different considerations would apply if one of the amalgamating clubs was already a company club; we assume that the new club would be a company one. 3.7 Working men’s clubs By special resolution of each of them, a working men’s club may amalgamate with another working men’s club, with or without dissolution or division of the funds of the two clubs.5 On amalgamation the property in each becomes vested in the trustees of the new club without conveyance or transfer.6 On amalgamation the Financial Conduct Authority will cancel the registrations of the two former clubs and the new club will be registered in their place.7 3.8 Community clubs A  community club may pass a special statutory resolution to amalgamate with another community club, with or without dissolution or division of the funds of the two clubs.8 On amalgamation the property in each club becomes vested in the new club without the need for any conveyance other than that contained in the special resolution.9 On amalgamation the Financial Conduct Authority will cancel the registrations of the two former clubs and the new club will be registered in their place.10 3.9 Company clubs The court has power to facilitate the amalgamation of companies under section 900 of the Companies Act 2006.11 If the two company clubs wish to establish a new company club, the court may make provision for the dissolution of the existing clubs without winding them up12 and may make provision for such other incidental, consequential and supplemental matters as are necessary to secure that the amalgamation is fully and effectively carried out.13 Each of the existing clubs must deliver a copy of any relevant court order to the registrar of companies within seven days of its being made.14 On registration of the new company the registrar of companies will issue a certificate of incorporation.15 3.10 Community Interest companies If a CIC structure is used, the process set out in 3.9 is applicable, save that the registration process also requires the involvement of the Office of the Regulator of Community Interest Companies.16 3.11 Charitable clubs If the charitable club is established as a charitable incorporated organisation (CIO) the Charities Act 2011 makes provision for 5 6 7 8 9 10 11 12 13 14 15 16

Friendly Societies Act 1974, s 82(1). Amalgamation is to be distinguished from transfer of engagements: see 3.20(1). Friendly Societies Act 1974, ss 54(1) and 58. Ibid, s 109(3) and see FCA’s Finalised Guidance FG 15/12, published 30 November 2015, at paras 8.66–8.77. Co-operative and Community Benefit Societies Act 2014, s 109(1) and (2). Amalgamation is to be distinguished from transfer of engagements: see 3.21(2). Ibid, s 50(1). Ibid, s 109(3) and see FCA’s said Guidance at paras 8.66–8.77. Amalgamation is to be distinguished from transfer of the whole undertaking: see 3.23(2). This transfer is the equivalent of merger. Companies Act 2006, s 900(2)(d). Ibid, s 900(2)(f). Ibid, s 900(6). Ibid, s 15(1). Companies (Audit, Investigations and Community Enterprise) Act 2004, ss 36–39.

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3.12  Dissolution of the Club amalgamation of two or more CIOs17 and, upon registration of the new CIO, the old CIOs are dissolved.18 The said Act also makes provision for the merger of two CIOs by dealing with the transfer of the undertaking of one CIO to another CIO.19 ‘Undertaking’ means its whole business operation, including property and other rights and liabilities.20 The Charity Commission will confirm the transfer by the end of six months, unless for some good reason it refuses to confirm.21 3.12 Community amateur sports clubs Insofar as a CASC will be an unincorporated members’ club or a company club, the reader is referred to 3.4 and 3.9 when it comes to amalgamation. 3.13 Literary and scientific institutions An institution (not having a royal charter nor established nor acting under an Act of Parliament) may amalgamate, wholly or partly, with any other like institution provided that three-fifths of the members present at a special meeting have agreed to the proposition to amalgamate.22 3.14 Proprietary clubs Amalgamation is a matter for the proprietors to decide and specify how to go about achieving this.

3.  Dissolution of the club 3.15 Overview Adequate mention of dissolution in the rules is important: see 3.1 and 3.2. The reader is referred to the model rules in Appendices K and L where dissolution is dealt with at the end of the rules. 3.16 Unincorporated members’ club In the ordinary way the members of the club will need to pass a resolution to dissolve the club. It is common to stipulate in the rules that a resolution to dissolve the club may be passed, and only passed, at a general meeting specially convened to consider the resolution to dissolve and that a two-thirds or three-fourths majority of those present at the meeting and entitled to vote will be required before the resolution is carried. It is also usual practice to require a specified number of members to sign the requisition for this special meeting, and sometimes this is put at a higher figure than required for a requisition to consider business other than the dissolution of the club. If the club held a registration certificate under the Licensing Act 1964, the rules were required to fix a number of requisitionists which did not exceed 30 nor more than one-fifth of the total number of members entitled to attend and vote at a general meeting (whichever was the less).23 There is no such rule requirement under the Licensing Act 2003. 3.17 Case law on dissolution The case of In Re William Denby & Sons Ltd Sick and Benevolent Fund24 concerned an unregistered friendly society but what was said 17 Charities Act 2011, s 235. 18 Ibid, s 239. 19 Ibid, s 240. 20 See Co-operative Group (CWS) Ltd v Stansell Ltd [2006] 1 WLR 1704, CA. 21 Charities Act 2011, s 243. 22 Literary and Scientific Institutions Act 1854, s 27: see Appendix A. 23 Licensing Act 1964, Sch 7, para 2(3). 24 [1971] 1 WLR 973.

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Dissolution of the club 3.18 in that case would equally apply to an unincorporated members’ club. Mr Justice Brightman said, at 978, that there were four situations where such a society could be treated as dissolved so as to render the unspent assets distributable in some direction:25 (1)

the occurrence of an event upon the happening of which the rules prescribe dissolution;26

(2)

where all the members, or the requisite majority, agree on dissolution;

(3)

where the court orders dissolution in the exercise of its inherent jurisdiction;27

(4)

where the substratum upon which the society was founded has gone.28

3.18 In the case of In re GKN  Bolts & Nuts Ltd Sports and Social Club29 (an unincorporated members’ club) Megarry  V-C, at 779, elaborated on the fourth situation: ‘As a matter of principle I would hold that it is perfectly possible for a club to be dissolved spontaneously … Mere, or even a long period of, inactivity on the part of the members of the club does not mean that the club is defunct or dissolved. But inactivity coupled with other circumstances may demonstrate that all concerned regard the club as having ceased to have any purpose or function, and so no longer existing. Short inactivity coupled with strong circumstances or long inactivity coupled with weaker circumstances may equally suffice to draw the inference of non-existence. In all cases the question is whether, putting all the facts together, they carry sufficient conviction that the club is at an end and not merely dormant.’ By way of example it is worth setting out why in that case the Vice-Chancellor, at 781, came to the conclusion that the club had become dissolved: ‘On that date [18 December 1975] the position was that the club had ceased to operate as a club for several months. The picture was not one of mere inactivity alone; there were positive acts towards the winding up of the club. The sale of the club’s stock of drinks was one instance, and others were the 25 It was pointed out by Lewison J  in Boyle v Collins [2004] EWHC 271 (Ch), at  [27] that ‘Although it is convenient shorthand to speak of “the dissolution of [an unincorporated] club” (or a fund), it is strictly inaccurate, since there is nothing to dissolve. All that has happened is that the members are no longer precluded from claiming their entitlement. Perhaps that is why in the Denby case Brightman J  said that a club was “treated as dissolved”.’ This dictum is controversial; we submit that Viscount Simmonds in Leahy v Attorney General for New South Wales [1959] AC 457 was right when he said (at 477) that an unincorporated association was for many purposes a continuing entity separate from its members, even though this is an undoubted legal anomaly. 26 In re Printers and Transferrers Amalgamated Trades Protection Society [1899] 2 Ch 184. 27 In re Lead  Co’s Workmen’s Fund Society [1904] 2  Ch  196; Keys v Boulter (No  2) [1972] 1 WLR 642, at 644 (Megarry J); Re Witney Town Football and Social Club [1994] 2 BCLC 487, at 491. The court here means the High Court of Justice as the county courts, being created by statute, have no inherent jurisdiction. 28 In re Customs & Excise Officers’ Mutual Guarantee Fund [1917] 2  Ch  18 (guarantee fund otiose because officers’ fidelity bonds no longer required); Feeney and Shannon v MacManus [1937] IR 23 (dining club’s premises destroyed in the Irish uprising of 1916); In re St Andrew’s Allotment Association [1969] 1 WLR 229 (sale of the land containing the allotments); cf  Re Stamford Working Men’s Club (1952) Times, 24  October and (1953) Times, 29 April, CA. 29 [1982] 1 WLR 774.

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3.19  Dissolution of the Club ending of the registration for VAT, and the dismissal of the steward. The cessation of any club activities, the ending of the use of the sports ground and the abandonment of preparing accounts or issuing membership cards were all in one sense examples of inactivity; but I think that there was in all probability some element of deliberation in these matters, and not a mere inertia … However, the resolution to sell the sports ground [the club’s last asset30] seems to me to conclude the matter.’ The Denby and GKN cases were followed by the case of Keene v Wellcom London Ltd,31 which concerned the dissolution of the Graphic Reproduction Federation, an unincorporated association which had been inactive for 27 years. Its current activity was minimal yet Mr Justice Peter Smith took the view that ‘while the association slept it was not dead’. The court, under its inherent jurisdiction, then decided itself to dissolve the association. 3.19 It is to be noted that the courts have no statutory jurisdiction under company or insolvency legislation to wind up an unincorporated members’ club which is a social club32 or probably any other type of unincorporated members’ club33 so long as it is not run along commercial lines and does not have objectives that read like a company’s objects clause.34 3.20 Working men’s club The dissolution of this type of club may be carried out in the following ways: (1) under section 82 of the Friendly Societies Act  1974, by the transfer of all the club’s engagements to another club registered under the 1974 Act35 or to a company under the Companies Act36 (viz a company club) or to a community benefit society37 (viz a community club).38 In this event the registration of the club becomes void and must be cancelled by the Financial Conduct Authority;39 (2)

under section 86 of the 1974 Act, by an instrument of dissolution approved by a special resolution of the club,40 that is to say, by not less than threequarters of the members entitled to vote at the meeting;41

(3)

under section 87 of the 1974 Act,42 by an order of the court on a petition for a compulsory winding up presented by the Financial Conduct Authority or the Prudential Regulation Authority where either authority receives a report on the affairs of the club from an inspector and it appears to the authority

30 So described by the judge himself. 31 [2014] EWHC 134 (Ch), at [33]. 32 In re St James’s Club (1852) De GM & G 383, at 389; 13 Halsbury’s Laws of England (2017) at para 291. 33 In re International Tin Council [1989] 1 Ch 309, CA, at 330. 34 Re The Construction Confederation [2009] EWHC 3551 (Ch): see further 3.47. 35 Friendly Societies Act 1974, s 82(2) as amended by Friendly Societies Act 1992, Sch 16, para 29. 36 Ibid, s 82(3) as amended by the said para 29. 37 Ibid. 38 Ibid. 39 Ibid, s 82(5) as amended by the Friendly Societies Act 1992, Sch 22, Part 1. 40 Ibid, s 93(1)(b). 41 Ibid, s 86(1)(b). 42 As substituted by the Friendly Societies Act 1992, Sch 16, para 34.

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Dissolution of the club 3.21 that it is in the interests of the members of the club or of the public that the club should be wound up; (4) under section 91 of the 1974 Act,43 by the cancellation of the club’s registration by the Financial Conduct Authority on the various grounds set out in this section, the most important of which are, in relation to clubs, where the club has wilfully and after notice from the authority violated any of the provisions of the 1974 Act or where the club has ceased to exist;44 (5)

under section 93 of the 1974 Act, upon the happening of any event declared by the rules to be the determination of the club (or branch);45

(6)

under section 95A of the 1974 Act,46 by an award of dissolution made by the Financial Conduct Authority after its investigation of the affairs of the club;47

(7)

if unregistered, by order of the court under the court’s inherent jurisdiction.48

3.21 Community club The dissolution of this type of club may be carried out in the following ways: (1) under section  5 of the Co-operative and Community Benefit Societies Act  2014, by the cancellation of the club’s registration by the Financial Conduct Authority on the various grounds set out in this section, the most important of which are, in relation to clubs, where the membership has been reduced to fewer than three members and/or where the club has ceased to exist; (2)

under sections 5 and 7 of the 2014 Act,49 by an order of the court on a petition presented for the cancellation of the club’s registration by the Financial Conduct Authority (after notice and due procedure) on the ground that it appears the club is not being conducted for the benefit of the community. Under section 7(4) of the 2014 Act, the Financial Conduct Authority may in such cases give directions about the winding up of the club’s affairs before its registration is cancelled;

(3)

under section 110 of the 2014 Act, by the transfer of all the club’s engagements to another club registered under the 2014 Act.50 This transfer will result in the cancellation of the registration of the transferor club;

43 Friendly Societies Act 1974, s 91(1) as amended by the Friendly Societies Act 1992, Sch 16, para 37. 44 As to whether a club has ceased to exist, see 3.17 and Boyle v Collins [2004] EWHC 271 (Ch), at [34] (Lewison J) (concerning the Luton Labour Club which was a working men’s club registered under the Industrial and Provident Societies Act). 45 Friendly Societies Act 1974, s 93(1)(a). 46 Inserted by Friendly Societies Act 1992, Sch 16, para 39. 47 Friendly Societies Act 1974, s 93(1)(c) as amended by Friendly Societies Act 1992, Sch 16, para 38. 48 In re Lead Co’s Workmen’s Fund Society [1904] 2 Ch 196; Re William Denby & Sons Ltd Sick and Benevolent Fund [1971] 1 WLR 973 49 As amended by Financial Services and Markets Act 2000 (Mutual Societies) Order 2001, art 13. 50 In Co-operative Group (CWS)  Ltd v Stansell  Ltd [2006] 1  WLR  1704 the Court of Appeal held that a transfer of engagements transferred not only obligations and liabilities to third parties, as well as to members, without the need for novation (which would normally require the consent of such third parties) but also contractual rights and property, again without any need for third party consent.

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3.22  Dissolution of the Club (4) under section  119 of the 2014 Act, by the consent of not less than threefourths of the members of the club testified by their signatures to the instrument of dissolution or, in the case of a dormant society, by a special resolution under section 120 of the 2014 Act;51 (5) under section  123 of the 2014 Act, by the dissolution of the club on its being wound up in pursuance of an order or resolution made as is directed in the case of companies, save that the FCA is substituted for the registrar of companies. It is considered, by analogy with company law, that a creditor or member of the club can also petition for the winding up of the club.52 3.22 With regard to 3.21(1), however, cancellation of registration does not necessarily dissolve a community club. It can continue as an unregistered society, that is, as an unincorporated members’ club.53 And because of this, in JM Sanderson v Hi Peak Property Ltd54 five claimant-members of the Hunloke Allotment Association Limited, which was registered under the Industrial and Provident Society Act 1893, were able to continue to assert contractual rights against the owner, the second defendant Mr Williams, after cancellation of the association’s registration in 2011. 3.23 Company club The dissolution of this type of club may be carried out in the following ways: (1)

by winding up the company.55 A winding up is either voluntary or compulsory. In both compulsory and voluntary liquidation, dissolution of the company occurs automatically three months after the registration by the registrar of companies of the liquidator’s final return at Companies House;56

(2) where the court makes an order sanctioning an arrangement whereby the whole undertaking of one company is transferred to another company57 and the court orders the dissolution of the transferor company without winding up;58 (3) by the registrar of companies taking steps to dissolve a company which in his reasonable opinion is neither carrying on business nor in operation.59 This process will entail the registrar ultimately publishing a notice in the London Gazette that at the expiration of two months the company’s name will be struck off the register unless cause is shown to the contrary and that the company will be dissolved.60 At the expiration of this period the registrar may

51 The instrument has to comply with the provisions of ss 121–122 of the 2014 Act. 52 See In re Surrey Garden Village Trust  Ltd [1965] 1  WLR  974 (where certain members unsuccessfully petitioned for the winding up of an industrial and provident society; the petition was dismissed, not on the ground that the members had no standing to bring the petition, but on the ground that the petition was opposed by a considerable number of other members and was oppressive and an abuse of process). 53 Hole v Garnsey [1930] AC 472, at 499 (Lord Tomlin). 54 [2014] EWHC 4918 (Ch) (Morgan J). 55 Insolvency Act 1986, s 73. On winding up a liquidator is appointed and the company will be in liquidation. It will be still in existence but unable to carry on any activity. 56 Ibid, s 201(1)–(2) for voluntary winding up and ibid, s 205(1)–(2) for compulsory winding up. Dissolving the company means removing its name from the register of companies with the result that the company will cease to be a legal person. 57 Companies Act 2006, s 900(2)(a). 58 Ibid, s 900(2)(d). 59 Ibid, s 1000(1). 60 Ibid, s 1000(3).

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Dissolution of the club 3.26 strike the company’s name off the register,61 and must then publish this fact in the London Gazette.62 This dissolution does not depend on insolvency; (4) by the directors, or a majority of them, applying to dissolve the company.63 The directors apply on a prescribed form to strike the company’s name from the register, and the registrar of companies will publish a notice in the London Gazette of his intention to strike the company’s name from the register at the expiration of two months after the date of the notice, and inviting any person to show cause why this should not be done.64 The registrar must publish a notice in the London Gazette that the company’s name has been struck off,65 and on publication the company will be dissolved.66 This dissolution does not depend on insolvency. 3.24 Voluntary winding up  There are two species of voluntary winding up, namely, members’ voluntary and creditors’ voluntary. In either case the members in general meeting must pass a resolution for voluntary winding up.67 A members’ voluntary winding up can only occur if the club is solvent, and this involves the directors making a statutory declaration of solvency that they have made a full enquiry into the company’s affairs and have formed the opinion that the company will be able to pay its debts in full together with interest.68 A creditors’ voluntary winding up comes about because the directors are unable to make the declaration of solvency.69 3.25 Compulsory winding up The court has jurisdiction to wind up a company compulsorily on the seven grounds set out in section 122 of the Insolvency Act 1986 but the two grounds which are most likely to affect a club are: (1)

the company is unable to pay its debts;70

(2) the court is of the opinion that it is just and equitable that the company should be wound up.71 An application for a compulsory winding-up order is by a petition presented to the court by the company or its directors or by a creditor or, in more limited circumstances, by a contributory (a member of the company).72 3.26 Community interest company A community interest company (CIC) is only allowed to cease being a CIC by dissolution or by converting to a charity,

61 62 63 64 65 66 67 68 69 70

Companies Act 2006, s 1000(4). Ibid, s 1000(5). Ibid, s 1003(1)–(2). Ibid, s 1003(3). Ibid, s 1003(4). Ibid, s 1003(5). Insolvency Act 1986, s 85(1). Ibid, s 89(1). Ibid, s 90. Ibid, s 122(1)(f). The definition of inability to pay debts is set out in ibid, s 123: either the club cannot pay its debts as they fall due (the cash flow test) or the value of the club’s assets is less than its liabilities, including contingent and prospective liabilities (the balance sheet test). 71 Ibid, s 122(1)(g). 72 Ibid, s 124.

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3.27  Dissolution of the Club which means that once a company becomes a CIC it cannot become a noncharitable company.73 The ways of dissolving a company are set out in 3.23. 3.27 Charitable incorporated organisation The dissolution of an Association CIO by its members should be carried out as follows:74 (1)

the charity trustees must apply to the Charity Commission for the dissolution of the CIO, giving them a copy of the resolution referred to below;75

(2)

at a meeting of the CIO’s members they must pass a dissolution resolution.76 This can be: (a) by a 75% majority of those voting at a general meeting; or (b) without a vote if no objections are raised at the meeting; or (c) if no meeting is held, by a unanimous agreement of the members;

(3) three months after the publication of its intention to dissolve it, the Charity Commission will dissolve the association by removing it from the register, unless cause has been shown to the contrary.77 3.28 Community amateur sports club The members of a CASC can vote to close a club as long as they do this by following the terms of their governing club document. If the members decide to close the club they must ensure that the club applies its net assets for CASC-approved sporting or charitable purposes. Net assets means what is left after paying debts and meeting other legally payable liabilities.78 3.29 Literary and scientific institution The dissolution of a club to which the Literary and Scientific Institutions Act 1854 applies is governed by section 29 of that Act and is carried out by a resolution passed by three-fifths of its membership. Otherwise what is said about unincorporated members’ clubs applies to these institutions, if they come within this category. In the event of any dispute on dissolution concerning the adjustment of its affairs, the matter must be referred to the local county court for the dispute to be resolved. 3.30 Proprietary club It is not strictly necessary for the rules of a proprietary club to deal with the question of dissolution of the club because of the nature of the contractual relationship between the proprietor and the club member. On the expiry of the period of the subscription, which no doubt will be the same date for all the members, the proprietor can simply say that he has decided to close down the club and the members will have no say in the matter. If he dissolves the club before the expiry of the period of the subscription, the individual member will have a claim in damages against the proprietor for the unexpired period of the subscription and for the loss of amenities during this period,79 unless the rules expressly cater for this contingency. On the other hand, it is considered good

73 Office of the Regulator of Community Interest Companies: Information and Guidance Notes 2016, Chapter 10. 74 See the Charity Commission’s guidance, How to Close a Charity (2 June 2014). 75 Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012, SI 2012/3013, reg 5. 76 Ibid, reg 6(1)(a). 77 Ibid, reg 18. 78 HM Revenue & Customs’ Guidance, updated 24 March 2020. 79 Re Curzon Syndicate Ltd (1920) 149 LT Jo 232. See 4.34 for a further discussion of this case.

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Members’ liability on dissolution 3.34 practice for a proprietor to state in the club rules the situation as to dissolution of the club since this avoids argument if or when dissolution occurs.

4.  Members’ liability on dissolution 3.31 Overview The general proposition which applies on dissolution of the club is that a member’s liability is restricted to his subscriptions. But there are exceptions which are mentioned in the ensuing paragraphs. 3.32 Unincorporated members’ club The member’s liability, unless the rules otherwise provide, will be limited to the payment of their entrance fee (if any) and to their subscriptions.80 As far as contracts entered into by the club are concerned, the residual liability of a committee member may well exceed their entrance fee and subscriptions.81 3.33 Working men’s club Although the Friendly Societies Act 1974 is silent on the point,82 it is considered that on dissolution the member’s liability will be restricted to their subscriptions.83 It is to be noted, however, that under section 87(3)84 of the said Act the Financial Conduct Authority can direct the members or officers of the club to pay some or all of the expenses of the inspector’s report referred to in 3.20(3). As far as contracts entered into by the club are concerned, the residual liability of a committee member may well exceed their subscriptions.85 3.34 Community club If the club is wound up in pursuance of an order of the court or a members’ resolution under the Insolvency Act 1986,86 the liability of a past or present member to contribute to the payment of the club’s debts and liabilities or the expenses of winding up is as follows: (1) a former member who ceased to be a member at least one year before the beginning of the winding up is not liable to contribute;87 (2)

a former member is not liable to contribute anything in respect of a debt or liability contracted after their membership ceased;88

(3)

a former member is not liable to contribute anything unless it appears to the court that the contributions of the existing members are insufficient to satisfy the just demands on the club;89

80 Wise v Perpetual Trustee Co [1903] AC 139, PC, at 149: see 1.11. 81 See further 13.5. 82 Unlike the later Friendly Societies Act  1992 which limits the liability of a member of an incorporated society to his subscriptions: Sch 3, para 8(1). 83 By analogy with the position of members of an unincorporated association: Wise v Perpetual Trustee Co [1903] AC 139. 84 As substituted by Friendly Societies Act 1992, Sch 16, para 34. 85 By analogy with the position of committee members of an unincorporated association: Wise v Perpetual Trustee Co [1903] AC 139. See further 13.5. 86 As is permitted by Co-operative and Community Benefit Societies Act 2014, s 123(1). 87 Co-operative and Community Benefit Societies Act 2014, s 124(1)(a). On the other hand, the liability of a member does not cease on his death so that his estate will take over his liability: In re United Service Share Purchase Society Ltd [1909] 2 Ch 526. 88 Ibid, s 124(1)(b). 89 Ibid, s 124(1)(c).

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3.35  Dissolution of the Club (4) no contribution shall be required from any person exceeding the amount (if any) unpaid on shares in respect of which they are liable as an existing or former member [the all-important provision];90 (5) where a withdrawable share has been withdrawn, a person is treated as ceasing to be a member in respect of that share as from the date of the notice or application for withdrawal.91 3.35 Company club The constitution of the company, whether limited by shares or guarantee, must state that the liability of its members is limited.92 Creditors therefore know that they cannot look to the whole property of the individual members to pay them but are restricted to the property of the company. Section 74 of the Insolvency Act 1986 regulates the member’s liability on the winding up of the company. Under this regime the members are obliged to ‘contribute’ to the company’s assets, hence these members are known as contributories. 3.36 Shares Where the company is limited by shares, the constitution must state that the liability of the member is limited to the amount, if any, unpaid on the shares held by them93 and this is replicated in article  2 of the 2008 Model Articles.94 The maximum liability of present and past members is limited to the amount unpaid on the shares.95 3.37 Guarantee Where the company is limited by guarantee, the member’s liability is limited to such amount as the member undertakes to contribute to the assets of the company in the event of its being wound up.96 The amount of the guarantee must be set forth in the company’s constitution.97 It is to be noted that under article 2 of the 2008 Model Articles98 the liability of each member is limited to £1 and this would be the norm. Past guarantors are only liable if the current guarantees do not meet the company’s debts.99 3.38 Community interest company Article  7 of the prescribed Articles of Association100 issued by the Regulator of the Community Interest Companies reflects the Model Articles in that the liability of each member is limited to £1 by way of contribution to the assets of the company in the event of its being wound up. 3.39 Charitable incorporated organisation Clause 8 of the prescribed constitution101 issued by the Charity Commission in relation to the Association CIO sets out a choice of liability in its rules. The association can either opt that its members shall have no liability if the association is wound up or alternatively that each member shall be liable up to a specified maximum amount.

90 Co-operative and Community Benefit Societies Act 2014, s 124(1)(d). 91 Ibid, s 124(1)(e). 92 Companies Act 2006, s 3. 93 Ibid, s 3(2). 94 See Appendix G. 95 Insolvency Act 1986, s 74(2)(d). 96 Companies Act 2006, s 3(3) and Insolvency Act 1986, s 74(3). 97 Companies Act 2006, s 11(3). 98 See Appendix H. 99 Insolvency Act 1986, s 74(2)(a)–(c). 100 Community Interest Company Regulations 2005, SI 2005/1788, Part 3. 101 Charities Act 2011, s 205(3).

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Impact of insolvency legislation 3.45 3.40 Community amateur sports club Insofar as a CASC is an unincorporated members’ club or a company club the reader is referred to 3.16 or 3.23 when it comes to members’ liability on dissolution. 3.41 Literary and scientific institution The dissolution of a club to which the Literary and Scientific Institutions Act 1854 applies is governed by section 29 of that Act and is carried out by a resolution passed by three-fifths of its membership. Otherwise what is said about unincorporated members’ clubs applies to these institutions, if they come within this category. In the event of any dispute on dissolution concerning the adjustment of its affairs, the matter must be referred to the local county court for the dispute to be resolved. 3.42 Proprietary club The proprietor is solely responsible for the club’s debts. The member of the club will have no liability to the club’s creditors unless by a quite separate contract made between the member and the creditor he or she expressly assumes liability, for instance, by giving a guarantee in respect of the club’s indebtedness to the club’s bankers.

5.  Impact of insolvency legislation 3.43 Overview The statutory insolvency regime involving any type of club is by no means straightforward and legal advice, if possible, should be sought. 3.44 Unincorporated members’ club Sections 220 and 221 of the Insolvency Act 1986 empower the court to wind up compulsorily an ‘unregistered company’ which includes ‘any association’. Under this regime the association can only be wound up if it is dissolved or has ceased to carry on business, or is unable to pay its debts, or the court is of the opinion that it would be just and equitable to wind up the association.102 The question arises whether an unincorporated members’ club is caught by these provisions. If it is, section 226 makes any contributory (ie the club member) liable to pay or contribute to the payment of any debt or liability of the club, the very antithesis of limited liability and of course way beyond the member’s entrance fee and annual subscriptions. Under previous but similar legislation the courts have held that an unincorporated members’ club cannot be wound up as an unregistered company because the reference to the ‘principal place of business’103 of the unregistered company demonstrated that the winding-up regime had no applicability to any association which was not engaged in trade or commerce and which was not conducted for gain.104 3.45 Case law on winding up An attempt by the creditors was made in Re Witney Town Football and Social Club105 to wind up the club under section 221 on the ground that it was unable to pay its debts. This was a club of professional 102 Charities Act 2011, s 221(5). 103 Now to be found in Insolvency Act 1986, s 221(3). 104 Re St James Club (1852) 2 De GM & G 383; Re Bristol Athenaeum (1889) 43 Ch D 236; Re Russell Institution [1898] 2 Ch 72, at 79. It is true that for landlord and tenant purposes the club does carry on a business (see Addiscombe Garden Estates v Crabbe [1958] 1 QB 513, CA; Coles v Samuel Smith Old Brewery (Tadcaster) [2007] EWCA Civ 1461) but that is not the same thing as being engaged in trade or commerce which would be contrary to the second criterion referred to in 1.1. 105 [1994] 2 BCLC 487.

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3.46  Dissolution of the Club footballers founded in 1885 and it owned property of considerable value. It owed debts of about £30,000 to five creditors. Rule 2 of its rules stated: ‘The club shall exist solely for the purpose of professional Association Football. The club will also provide various social amenities for its members’. The members numbered some 500 whose liability under the rules was restricted to their subscriptions. Rule 17 of its rules stated that ‘upon dissolution of the club, all net assets shall be devoted to Association Football and not distributed between the members’. On appeal from the dismissal of the winding up petition, Mr Justice Morritt held that whether or not a club was ‘an association’ within the meaning of section 220 depended on the true construction of the rules rather than the size and activity of the club.106 He decided that its rules were within the category of a normal club and as such the club was outside the statutory winding up provisions. 3.46 However, in the Witney case, the judge added, at 491, the comment that the club could still be wound up by the High Court under its inherent jurisdiction. This is of course quite a different matter from being wound up under the provisions of the Insolvency Act 1986 where a liquidator would be appointed, one of whose duties would be to receive proofs of debt from unsecured creditors. In Baker v West Reading Social Club107 the said comment was adopted and the court taking into account various factors108 exercised its inherent jurisdiction to wind up the club and appoint a liquidator without full statutory powers but instead with fewer selected powers, which the court could later extend, if necessary. 3.47 The Witney case was followed in Panter v Rowellian Football Social Club,109 concerning an unincorporated members’ club, where the petitioning creditor was an unsecured creditor who sought an administration order against the club under section 221, and Judge Behrens sitting as a High Court judge stated, ‘[The club] has none of the normal attributes of a company. The membership rules; [and] the provision for subscriptions and expulsions are those of a club, not a company’. In contrast is the case of Re The Construction Confederation,110 an unincorporated association, which was being wound up with debts exceeding £300,000, and Judge Purle QC sitting as a High Court judge stated, ‘This is not, as in the case of an ordinary members’ club, an organisation one joins simply for the purpose of recreation and pleasure in return for an annual subscription. The rules clearly envisage that the members may become liable as such to contribute to the liabilities… It is a trade association, not a place where people meet to eat, dine, formerly smoke and now merely drink, or [meet] for other recreational purposes, but an organisation that is meant to promote the trade interests of its exclusively commercial membership.’

106 So that the fact the club members were professional footballers was of no consequence. 107 [2014] EWHC 3033 (Ch) (Mr Edward Murray, sitting as a Deputy Judge of the Chancery Division). See also Keene v Wellcom London Ltd [2014] EWHC 134 (Ch). 108 The key factors in favour of using the inherent jurisdiction were that: (a) the club was not currently operating and showed no prospect of doing so; (b) all its assets were in cash form; (c) no-one previously involved in the management of the club was interested in still being involved; (d) winding up could help to resolve disputes between current and former club trustees; (e) funds were available to distribute to creditors; (f) no alternative method of winding up was available; and (g) there were no objections to the winding up after it was advertised. 109 [2011] EWHC 1301 (Ch), at [24]. 110 [2009] EWHC 3551 (Ch), at [7].

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Impact of insolvency legislation 3.52 Thus the judge held the confederation was an unregistered company under section 220 which was subject to the insolvency legislation. 3.48 Working men’s club Their position is the same as an unincorporated members’ club. 3.49 Community club Under the Co-operative and Community Benefit Societies Act 2014 and associated secondary legislation,111 the insolvency regime applicable to companies under the Insolvency Act 1986 applies to clubs registered as community benefit societies with a few minor modifications to ensure that any reference to the registrar of companies in the Insolvency Act 1986 now means the Financial Conduct Authority. The provisions of the Insolvency Act 1986 concerning liability for fraudulent or wrongful trading apply to a society’s committee members and officers once the society has gone into liquidation.112 3.50 Disqualification of officers and committee Section 22E inserted into the Company Directors Disqualification Act 1986113 applies this Act to officers and committee members of societies registered under what is now the Co-operative and Community Benefit Societies Act 2014.114 See 3.53 for information as to what this means. 3.51

Administration order This procedure is applicable:115 see 3.54.

3.52 Company club It should first be noted that, whereas the director of a solvent company manages the affairs of the company for the benefit of the shareholders or members of the company, it is well established that in relation to the fiduciary duties of a director of an insolvent company it is the interests of the creditors which intrude and come to the fore.116 Secondly, leaving aside the limited liability of the members of the company (ie the ordinary members of the club), which is dealt with at 3.35, members who are directors should be aware of the four situations where the director may become personally liable for the debts of the company or to contribute to the company’s assets in the event of a winding up of the company. They are: (1) being made liable for misfeasance or breach of fiduciary or other duty;117 (2) being made liable for fraudulent trading;118 (3) being made liable for wrongful trading;119 or (4) acting

111 Co-operative and Community Benefit Societies Act 2014, ss 65–66 (receivership); ss 123– 124 and 126 (liquidation and dissolution); and 125 (administration); the Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014, SI 2014/229 (administration). See Ian Snaith (ed), Handbook of Co-operative and Community Benefit Society Law (2014) para 12.8. 112 Co-operative and Community Benefit Societies Act 2014, s 123. 113 Inserted by the Co-operative and Community Benefit Societies and Credit Unions Act 2010, s 3. 114 See Ian Snaith (ed), Handbook of Co-operative and Community Benefit Society Law (2014) paras 7.5–7.6. 115 See the Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014, SI  2014/229 for the application of these provisions to community clubs. 116 Jetivia SA v Bilta (UK) Ltd (in liquidation) [2015] UKSC 23 per Lords Toulson and Hodge at [123] to [127]. 117 Insolvency Act 1986, s 212. 118 Ibid, s 213. 119 Ibid, s 214.

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3.53  Dissolution of the Club whilst disqualified as a director.120 Liability for wrongful trading only arises in the context of an insolvent winding up.121 3.53 Disqualification of directors There is also the question of disqualifying a director under section 6 of the Company Directors Disqualification Act 1986 if in an insolvent liquidation he is found to be ‘unfit’ to be a director. Unfitness here can mean incompetence if: (1) the director caused the company to trade whilst insolvent; and (2) there was no reasonable prospect of meeting creditors’ claims.122 Although in clubs a miscreant director and others who are caught by these provisions will be a shareholder or member of the company, it is their management or lack of it which gives rise to liability, not their membership of the company. Thus the ordinary club member will fall outside the ambit of these provisions. 3.54 Administration order There should be mentioned the possibility of an administration order being made in respect of a company (or a community club) under the Insolvency Act 1986.123 The statutory objectives of administration are: (1) rescuing the company as a going concern; or (2) achieving a better result for the company’s creditors than would be likely if the company were wound up without first being in administration; or (3) realising property to make a distribution to one or more secured or preferential creditors.124 Objective (1) must be given priority.125 An application to the court for an administration order may be made by the company itself126 or by the directors127 or by one or more creditors of the company.128 Alternatively, the company or the directors or a creditor holding a floating charge over the whole or substantially the whole of the company’s property may appoint an administrator without court proceedings,129 although such an appointment does not take effect until notice of the appointment is filed with the court.130 Save in the case of a creditor exercising his floating charge,131 the court cannot make an administration order without proof of the company’s insolvency or the likelihood of its insolvency.132 This administration process was devised in 1986 to help companies facing insolvency by giving them an opportunity to obtain an administration order with a view to entering into a voluntary arrangement with its creditors or, alternatively, to allow a more advantageous realisation of assets than would be effected on a winding up. It is therefore a half-way house on the road to liquidation. 3.55 Community interest company Where this type of company is wound up, the Community Interest Company Regulations 2005133 vary the normal 120 Company Directors Disqualification Act 1986, s 15. 121 Insolvency Act 1986, s 214(2). 122 Secretary of State for Trade and Industry v Creegan [2001] EWCA Civ 1742. In other words, merely trading insolvently is not enough on its own. 123 See the Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 for the application of these provisions to community clubs. 124 Insolvency Act 1986, Sch B1, para 3(1). 125 Ibid, Sch B1, para 3(3). 126 Ibid, para 12(1)(a). 127 Ibid, para 12(1)(b). 128 Ibid, para 12(1)(c). 129 Ibid, paras 14 and 22. 130 Ibid, paras 18, 19, 29 and 31. 131 Ibid, para 35. 132 Ibid, para 11(a). 133 SI 2005/1788 (as amended).

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Impact of insolvency legislation 3.60 procedures for distributing the company’s assets, and this is reflected in the articles of association issued by the Regulator of Community Interest Companies. Article 3 sets out the provisions relating to the imposed lock on the company’s assets: if the company is wound up under the Insolvency Act 1986 and after all its liabilities have been satisfied, any residual assets shall be given or transferred to the assetlocked body specified in article 3.5 in the company’s articles; or (with the consent of the Regulator) to any other asset-locked body; or a transfer shall be made for the benefit of the community which is other than a transfer of assets into an assetlocked body (see article 3.2). 3.56 Charitable incorporated organisation The Insolvency Act 1986 is applied, with modifications,134 so that the organisation is subject to the same insolvency and dissolution procedures as a registered company. This means that the organisation can be the subject of a voluntary arrangement,135 be placed in administration136 or in receivership,137 or be wound up voluntarily138 or by the court.139 An alternative regime is established in Part 3 of the Charitable Incorporated Organisations (General) Regulations 2012 which deals with the dissolution of an organisation instead of this being carried out under the Insolvency Act 1986. Under this regime the organisation can apply to the Charity Commission for voluntary dissolution.140 The regulations specify how an application is to be made141 and in an Association CIO that the members must first pass a resolution to apply for dissolution.142 3.57 Disqualification of charity trustees Section 22F inserted into the Company Directors Disqualification Act 1986143 applies this Act to the charity trustees of a charitable incorporated organisation. See 3.53 for information as to what this means. 3.58 Community amateur sports club Insofar as a CASC is an unincorporated members’ club or a company club, the reader is referred to 3.44 or 3.52 when it comes to insolvency legislation. 3.59 Literary and scientific institution Insofar as the institution is an unincorporated members’ club or a company club, the reader is referred to 3.44 or 3.52 when it comes to insolvency legislation. 3.60 Proprietary club If the proprietor is a company, the provisions of the Insolvency Act 1986, which are referred to in 3.52, will apply to the directors of this company, not to the club’s officers. The liquidator of the proprietor company, however, will be under a statutory duty to get in, realise and distribute the

134 Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012, SI 2012/2013, reg 3 and Sch 1. 135 Insolvency Act 1986, Part 1. 136 Ibid, Part 2. 137 Ibid, Part 3. 138 Ibid, Part 4. 139 Ibid, Part 6. 140 Charitable Incorporated Organisations (General) Regulations 2012, SI 2012/3012, reg 4. 141 Ibid, reg 5. 142 Ibid, reg 6. 143 Inserted by the Charitable Incorporated Organisations (Consequential Amendments) Order 2012, SI 2012/3014, art 1.

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3.61  Dissolution of the Club company’s assets to the company’s creditors,144 so that the members of the club might find themselves with a new proprietor not to their liking, or with no club at all if the liquidator were to sell the club premises with vacant possession. Any claim for damages against the company in respect of the unexpired portion of the subscription period will form the subject matter of a proof of debt lodged by the member as an unsecured creditor.145 3.61 If the proprietor is an individual person and he becomes bankrupt, his assets will, generally speaking, automatically vest in his trustee in bankruptcy146 who, like the liquidator, will take steps to realise any asset for the benefit of the bankrupt’s creditors,147 with the same possible consequences as are mentioned in 3.60.

144 Insolvency Act 1986, s 143(1). 145 See Re Curzon Syndicate Ltd (1920) 140 LT Jo 232. 146 Insolvency Act 1986, s 306. 147 Ibid, s 324(1).

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Part 2:

Internal Relationships: The Club and its Members

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Chapter 4

Admission into the Club

1.  Formal process 4.1 A formal process of admitting members into a club is what distinguishes a club from an amorphous group of people who happen to come together for a particular occasion or event. The occasion or event may recur many times with the same people coming together but their gathering can in no wise be described as a club.1 This formal process could in theory be very simple. The club rules could provide that the club was open to all those who supported its objects and that upon the payment of a specified sum the applicant for admission would be admitted into the club, for example, in Woodford v Smith2 the printed application form was entitled ‘Membership Form’ and stated, ‘I consent to my name being included in the list of members of the Fulham and Hammersmith Ratepayers’ and Residents’ Association, and I undertake to pay an annual subscription of £[x]’.

2.  Selection process 4.2 In practice a club, of whatever nature, will want to ensure as far as possible that its members are congenial to one another so that a process of selection is introduced. A simple form of selection is to lay down that admission is by invitation only. And one commonly talks about the election of members to a club rather than admission of members. This ability to reject those persons who are, or apparently are, unsuitable or unacceptable to join a club has been an important factor in sustaining clubs over a long period of time. And, as a general proposition, a person cannot complain if he or she is refused membership of a club.3 It is for this reason that it is unwise for the club to inform the candidate why they were not elected. Different considerations will apply if the refusal is seen as an unlawful restraint of trade4 or if the club is a community amateur sports club.5 The advent of the Equality Act 2010, too, has considerably altered the landscape on this topic in that it was enacted to ensure that people are not unfairly excluded from clubs which 1

Stafford Borough Council v Elkenford Ltd [1977] 1  WLR  324, CA, per Lord Denning MR at 327. 2 [1970] 1 WLR 806. 3 Nagle v Fielden [1966] 2  WLR  1027, CA, at 1032 (where Lord Denning said, ‘If a man applies to join a social club and is black-balled, he has no cause of action: because the members have made no contract with him. They can do as they like’). 4 Nagle v Fielden ibid (concerning the Jockey Club’s refusal to admit into membership a professional horse trainer who was a woman). 5 See 1.63.

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4.3  Admission into the Club they would like or are eligible to join, but are unable to do so because of the discrimination being exercised against them.6 4.3 It is the normal practice in the great majority of members’ clubs for the ordinary members to be elected and, where the club held a registration certificate under the Licensing Act  1964, this was compulsory.7 The Licensing Act  2003, perhaps more properly, reverts to the language of admission.8 The process of election can be either done by the members in general meeting or, since that is often an unwieldy procedure, is more commonly done by the committee which itself has been elected by the members. Whichever way is chosen, the procedure should appear in the rules. There is nothing improper or unusual in a club placing a maximum number on its membership9 or laying down criteria or qualifications which the candidate must fulfil for admission into the club.10 It is usual for the club to require a candidate to be proposed and seconded by one or more members of the club but there is no requirement at law that this should be the case; the rules may permit the candidate simply to apply to the club secretary who will refer the matter to the committee or the members, as the case may be, for their decision. 4.4 It used to be very common for social clubs to adopt the practice of blackballing, that is to say, stipulating in the rules that one or two black balls in the ballot box would result in the automatic rejection of any application for membership (the white balls signifying acceptance of the application). Nowadays if such a practice is adopted it is done with slips of paper. But the principle remains the same. The practice, however, must be expressly embodied in the rules since it introduces a special voting procedure which will override the normal rules as to voting majority (as to which see 6.41). 4.5 In a proprietary club it is common for the proprietor to make the decision whether to admit the applicant without there being any election by the members. Sometimes, however, the proprietor establishes a membership committee to deal with applications for membership, in which case he might retain a power of veto in respect of any particular application or he might insist on some representation on the committee.11

3.  Categories of membership 4.6 The majority of clubs have more than one category of member and it is important to clarify in the rules what are the rights and obligations of each category of member.

6 See 4.19–4.26. 7 Licensing Act 1964, Sch 7, para 3(1). 8 Licensing Act 2003, s 62(2). 9 For example, the Kennel Club limits its ordinary membership to 1,500 and the Roxburghe Club (see footnote 187 to 1.64) limits its membership to 40. This limitation on numbers would apply to a community amateur sports club, even though required to be ‘open to the whole community’ (see 1.51) provided, we surmise, the restriction was a reasonable one. 10 For example, the Roxburghe Club restricts its membership to those who possess distinguished libraries or book collections or those who have scholarly interests in books; and the Oxford and Cambridge Club in London restricts its membership to those who have defined connections with Oxford or Cambridge University. 11 See the example given in 1.68.

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Categories of membership 4.11 4.7 Ordinary members In every club this class of member will form the vast majority of the membership since it is these members who in the ordinary course of events pay the entrance fee (if any) and the annual subscription which keeps the club afloat financially. They are often referred to in the rules as full members.12 4.8 It is customary for ordinary members to be annual members in the sense that their subscription is renewable on a yearly basis, but there are occasions when ordinary membership is offered for a longer term than one year. If a club wished to raise a certain sum of cash straightaway, it could offer a five-year membership whereby the member paid his five years’ subscriptions forthwith at a discounted rate. There is no legal requirement that all categories of member shall pay the same subscription or for the same period of time. 4.9 On occasion disputes arise as to whether or not somebody is a member of a club.13 This should not present any problem in practice. The member’s application is normally done on a written form provided by the club or done by written communication from the club secretary. It is commonplace, however, for these documents to be lost or misplaced. This does not matter because the best evidence of continuing membership is the demand for, and the payment of, the annual subscription. With regard to a community club, it is required to keep at its registered office the names and addresses of all it members14 and the member may (but not usually) be issued with a share certificate. If the club is a company limited by shares or by guarantee, it too is required to keep at its registered office the names and addresses of all its members15 and, in the former case, the member will be issued with a share certificate (usually a £1 ordinary share). With regard to a proprietary club, the proprietor will be wise to issue a club membership card both on admission to the club and on renewal of the annual subscription. In Boyle v Collins16 (concerning a community club) Mr Justice Lewison commented that in most cases the committee can decide whether or not a particular person was a member of a club, because the membership situation would be obvious to them. 4.10 Life members Life membership is, as its name indicates, for the member’s lifetime. It is offered on the same financial basis as the five-year membership referred to in 4.8. The life member will pay his subscriptions all in one go, discounted for the fact that the club is receiving a large part of the money in advance of the dates it would otherwise have become due. Life members invariably enjoy the full privileges of membership, save that no further subscriptions will become due from the member. Some clubs have a category of honorary life members awarded in recognition of their long membership of the club or their outstanding services to the club,17 where the member is excused from any further subscription but is still able to participate fully in the activities of the club. 4.11 Life membership does not render the member immune from being suspended or expelled from the club, though no doubt due consideration would be given to the fact of life membership in dealing with the matter. A life member,

12 See In Re GKN Bolts & Nuts Ltd Sports and Social Club [1982] 1 WLR 774, at 784. 13 See eg Woodford v Smith [1970] 1 WLR 806. 14 Co-operative and Community Benefit Societies Act 2014, s 30. 15 Companies Act 2006, ss 113 and 114. 16 [2004] BCLC 471, at 484–85. 17 Some clubs award a vice-presidency as a mark of gratitude instead of an honorary life membership.

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4.12  Admission into the Club like all other members, is entitled to resign from the club. A  life member who resigned or was expelled would not be entitled to claim back any proportionate part of his life membership fee because the whole sum was paid on an earlier date as the consideration for being granted life membership. Care must be taken in the drafting of the rule relating to the club’s ability to offer life membership. No further annual subscription may be demanded, but it may be that the club would wish to reserve the right to require all members, including life members, to pay a levy at some time in the future to cover, for example, an unexpected item of expenditure. If so, the rules would have to make express provision for such demand being made of life members. 4.12 Honorary members Honorary membership is usually offered to a member or non-member of the club as a reward for past services or assistance to the club or who by reason of his distinction or position or experience in the field of activity in which the club operates will be an ornament to the club or will be able to assist the club in some material way. It is common practice for the honorary members to be elected by the managing committee and their number restricted in the rules. These members do not pay any entrance fee or subscription. They enjoy the privileges of membership save that almost invariably they have no voting rights at general meetings and are ineligible for election to any office within the club. Their position should be clearly stated in the rules. 4.13 Junior members  It is common, especially in sporting or recreational clubs, for there to be a junior section or a family section where the members are aged under 18 years.18 The position with regard to junior members should be carefully spelt out in the rules.19 The following are important points to bear in mind: (1)

a minor, ie a person under 18, is not liable for any contract save contracts for necessaries20 so that technically the junior member will not be liable for his subscription. Because of this it is essential that the parent or sponsor of the junior member countersigns the application form for membership in their capacity of contracting party;

(2)

there is no defence of minority when it comes to the law of tort.21 If, however, a junior member through negligence or wilfulness causes damage to club property or injury to someone on club property, he will be unlikely to have the financial resources to pay compensation. Therefore, on the same application form, it is a wise move to make the parent or sponsor expressly agree to make good any damage or injury caused by the junior member. The consideration for such agreement will be the granting of junior membership;

18 A person under the age of 18 but above the age of 16 may be a member of a community club if the rules so permit and may enjoy all the rights of a member, but may not be a committee member, trustee, manager or treasurer of the club: Co-operative and Community Benefit Societies Act 2014, s 31. 19 An example of a junior membership rule is contained in Appendix K. 20 Chitty on Contracts (33rd edn, 2019) at 9-010. Necessaries are such things as relate to the person of the minor, eg necessary food, drink, clothing, lodging and medicine. Under s 3 of the Minors’ Contracts Act 1987 the court has power to require the minor to transfer any property he has acquired under an unenforceable contract if it is just and equitable to make him do so. 21 Clerk and Lindsell on Torts (22nd edn, 2017) at 5.52–5.61.

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Categories of membership 4.15 (3)

a junior member should take no part in the running of the club and therefore the rules should spell out precisely what privileges or restrictions shall apply to junior membership;

(4) it is considered good practice for a junior member on attaining his majority to apply to become an ordinary (or full) member of the club in accordance with the established procedure set out in the rules. 4.14

Associate members This phrase is used in different senses:

(1)

it is a form of membership which comes with fewer privileges than ordinary (or full) membership. In a few large or important clubs, the applicant may have to start his membership at this level and then progress to full membership;

(2)

it is a form of reciprocal membership where the members of another club are admitted to the host club on a temporary basis because, say, the other club is shut for refurbishment;

(3) it is another form of reciprocal membership where a club enters into a reciprocal agreement with an overseas club whereby the members of each club are entitled to the benefits of the other club. The necessary terms will be set out in the host club’s bye-laws. The permitted length of stay of the associate member is normally 14 days; (4)

it is a form of membership used by umbrella organisations22 where the rules of the umbrella organisation and the rules of the host club permit entry into the host club by members of other affiliated clubs, albeit with restricted privileges;

(5)

it is a term of art used by section 67 of the Licensing Act 2003. In this context a person is an associate member of a club if, in accordance with the rules of the club into which he is being admitted, he is a member of a recognised club, that is to say, it is a club which satisfies conditions 1 to 3 of the general conditions set out in section 62 of the Act.23

In the light of the various uses of the phrase, ‘associate member’, it is important that the rules are explicit and clear on this topic. It should be added that often these members are simply referred to as associates. 4.15 Temporary members There is nothing to prevent a club from having in its rules a category of temporary members but it is a category which needs to be handled with care. The club members need to be satisfied that such a category will be of benefit to the club. The category must form only an insignificant proportion of the overall membership,24 otherwise the club may cease to be a genuine members’ club. It is a good practice for the rules to state that any temporary member shall be admitted only on the authority of, say, two members of the managing committee and that the temporary membership will only last for a limited period, say, 14 days. The rule can limit temporary membership to a particular occasion. Suppose the

22 See 1.67. 23 See 9.11 for these conditions and 9.34 for the position of associate members under the Licensing Act 2003. 24 This point was specifically dealt with under para 3(2) of Sch 7 to the Licensing Act 1964. There is no equivalent provision in the Licensing Act 2003 but a surfeit of temporary members will make it very difficult for a club to comply with the condition that it must be a club established and conducted in good faith as a club: s 62(4) of the 2003 Act.

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4.16  Admission into the Club Basset Chess Club holds an annual chess tournament in Basset which lasts for one week and attracts grandmasters and many chess devotees who have no associate member status; the rules or bye-laws can cater specifically for the admission of persons attending this event as temporary members for the week in which the tournament is held. The admission of temporary members is subject to the twoday rule.25 It should be added that if temporary members are admitted, they are entitled to enjoy all the facilities of the club, so that it would be wrong to exclude them from, say, participating in a club raffle or from a particular bar. 4.16 Affiliates This term has been in the past and still is used as a synonym for a member of a society or an associate.26 This is a recipe for confusion in club law. In this context it is best used as denoting a connection between the club and/ or its members and another, larger group of clubs, all of whom have a common interest or aims, and which does not necessarily involve the affiliates in any paying membership of the larger group. An example of affiliation used in this context is set out in Appendix L in the rules of the Bassetshire Hockey Umpires Association.

4.  Restrictions on right to reject applications for membership 4.17 Lawful discrimination By its nature a club almost invariably discriminates in its admission procedure. As described in 4.2, the members of a club admit to membership those whom they find congenial by reason of mutual interests, sporting ability, adherence to a political persuasion or whatever. There is nothing to prevent the members of a club excluding applicants for membership for reasons which to an outside observer may seem completely unreasonable, provided such exclusion has not been prohibited by Parliament. 4.18 Lack of sports ability It probably goes without saying that a sports club is entitled to insist on a minimum standard of ability before considering an application for membership. An applicant for playing membership of Marylebone Cricket Club is required to display a considerable standard of skill if he is to stand any chance of his application being accepted. Most private golf clubs, too, require an applicant for full membership either to have a recognised handicap or to be able to demonstrate a good knowledge of and ability in the game. On the other hand, a village cricket or football club may well not make such demands, on the basis that a place in a team can always be found for an enthusiast. The introduction of the community amateur sports club (‘CASC’)27 has complicated the issue in that a club which applies to register as a CASC, or to receive lottery funding, must make its application procedure open to the whole community. At least 50% of the club’s members must take part in the eligible sport in which the club engages.28 The club may, however, refuse (or revoke) membership where it is likely to be contrary to the best interests of the sport or the good conduct and interests of the club.29

25 Licensing Act 2003, s 62(2). 26 See the Oxford Shorter English Dictionary. 27 See 1.47. 28 See 1.56 (Finance Act 2013). 29 See HMRC, Community Amateur Sports Clubs: detailed guidance, updated to 24 March 2020.

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Restrictions on right to reject applications for membership 4.21 4.19 Unlawful discrimination: Prior to the Equality Act 2010 (‘EQA 2010’), which came into force on 1  October 2010,30 it was unlawful for a club to discriminate against a person on the grounds of race31 or disability32 or sexual orientation33 when considering an application for membership but that was the extent of unlawful discrimination as far as clubs were concerned. This is another area where the existing piecemeal legislation has been consolidated into one Act of Parliament covering all aspects of discrimination, harassment and victimisation. Clubs are subject to the full range of anti-discrimination legislation, and this affects their admission procedures. The purpose of the EQA  2010 is to protect certain personal characteristics from discrimination. Part  7 of EQA  2010 (sections 100– 107) and Schedules 15 and 16 deal specifically with ‘associations’ when it comes to admission into membership. 4.20 Application to clubs EQA  2010 applies to an ‘association’, which is defined as a body with at least 25 members,34 where access to membership is controlled by rules and which involves a process of selection.35 Membership may be of any description,36 eg full member, associate member or temporary member. The association itself may be incorporated or unincorporated37 and may be a private club or a proprietary club.38 The generic word ‘body’ is sufficiently wide to cover a club or a society or an association.39 4.21 Protected characteristics The following are protected characteristics under EQA 2010 which affect associations: (1) age; (2) disability; (3)

gender reassignment;

(4)

pregnancy and maternity;

(5)

race (which includes colour, nationality and ethnic or national origin40);

(6)

religion or belief (or lack of belief);

(7) sex; (8)

sexual orientation.

Insofar as EQA 2010 applies to disabled persons seeking membership,41 this imposes a duty on an association to consider taking the reasonable steps outlined in 5.78 when it comes to their applications for membership. 30 The duty to make reasonable adjustment to common parts of premises is not yet in force: see Sch 4, paras 5–7. 31 Race Relations Act 1976, s 25. 32 Disability Discrimination (Private Clubs etc) Regulations 2005, SI 2005/3258, regs 7 and 8. 33 Equality Act (Sexual Orientation) Regulations 2007, SI 2007/1263, reg 16. 34 Equality Act 2010, s 107(2)(a). A Minister of the Crown may by order amend this number: ibid, s 107(3). 35 Ibid, s 107(2)(b). 36 Ibid, s 107(5). 37 Ibid, s 107(4)(a). 38 Ibid, s 107(4)(b). What the subsection actually says is that it does not matter whether the association is carried on for profit. 39 Ibid, ss 4 and 100(1). 40 Ibid, s 9(1)(b). 41 Ibid, Sch 15, para 2(2)–(5).

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4.22  Admission into the Club 4.22 Single characteristic associations EQA  2010 permits by way of exception an association, whose purpose is to bring together persons with a shared protected characteristic such as that of nationality or sexual orientation or a particular disability, to continue to operate its admission procedures based on restricted membership.42 Thus the Bassetshire Constitutional Club may continue as a gentlemen’s club by restricting its membership to those who share a protected characteristic, in this instance the male gender (a characteristic of sex). The club, however, cannot go on to restrict its membership to Christian men since that would be restricting its membership to two protected characteristics, namely, sex and religion. In other words, the club can restrict its membership to men (sex) or Christians (religion), but cannot impose a double restriction. Under EQA 2010 an association of blind persons can restrict its membership to blind persons and would not be required to admit to membership persons with another disability, say, deafness. It is unlawful, however, for any association to restrict its membership to people of a particular colour under the guise of the protection of the characteristic of race.43 So the Basset Afro-Caribbean Society can restrict its membership to the Afro-Caribbean community provided it does not restrict its membership to black persons.44 4.23 Discrimination It is unlawful for an association to practise either direct or indirect discrimination: (a) when it comes to the arrangements for deciding whom to admit to membership; or (b) in laying down the terms on which it is prepared to admit a person to membership; or (c) by not accepting a person’s application for membership.45 (1)

Direct discrimination This takes place where, because of a protected characteristic, or because of a combination of two protected characteristics, one person treats another person less favourably than he would treat others.46 For example, the Basset Social Club may not refuse to accept membership applications from persons or charge them a higher subscription rate simply because they are Muslims or because they are gay Christians. This is direct discrimination, in the former case, on the ground of religion and, in the latter case, on the combined ground of religion and sexual orientation. The Basset Golf Club, which has members of both sexes, may not lay down a rule of admission that female members may only play on certain days whereas male members may play at all times. This is direct discrimination on the ground of sex. A club may, however, discriminate on account of the applicant’s age if this is justified, that is to say, the discrimination is a proportionate means of achieving a legitimate aim.47 For example, the subscription of youngsters at the Basset Tennis Club may be set at a discounted rate to encourage their participation in the game of tennis at an early age.

42 Equality Act 2010, Sch  16, para  1(1). Special provisions relate to associations which are charities: ibid, ss 193 and 194. 43 Equality Act 2010, Sch 16, para 1(4). 44 This would, curiously, be an emanation of the now-banned colour bar. A classic example was Dockers’ Labour Club and Institute v Race Relations Board [1976] AC 285 where the club operated an express colour bar to prevent persons of colour from entering into the club. 45 Equality Act 2010, s 101(1)(a)–(c). 46 Ibid, ss  13(1) and 14(1). Pregnancy and maternity are excluded from any combination: ibid, s 14(2). 47 Ibid, s 13(2). By s 197 a Minister of the Crown may by Order amend EQA 2010 relating to the topic of age.

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Restrictions on right to reject applications for membership 4.24 (2)

Indirect discrimination This takes place when a condition, rule, policy or practice applies to everyone but disadvantages people who share a protected characteristic.48 The association must not thereby put that other person at a disadvantage when it comes to membership.49 Indirect discrimination may be excused if the provision, criterion or practice can be shown to be a proportionate means of achieving a legitimate aim.50 Take the example of a Jewish hockey player who wants to join the Basset Hockey Club where the trial for new players always takes place on a Saturday, precluding his attendance. This could amount to indirect religious discrimination unless the practice was justified, for instance, no other day of the week was found to be satisfactory for a trial day. On the other hand, indirect discrimination which fairly applies across the board to all applicants will not be unlawful, so that the Basset Rugby Club could lawfully apply criteria for admission which excluded all those persons incapable of participating in the vigorous contact sport of rugby, even though these criteria resulted in indirect discrimination against disabled persons.51

(3)

Concessions as to age discrimination A concession for this purpose is the permitted treatment which is more favourable to certain persons.52 From 1 October 2012 the giving of a long term (or time limited) concession re: (a) the admission to membership; or (b) the terms of access to facilities, benefits or services to members in a particular age group or who have been members for longer than a certain time, is no longer regarded as a contravention on the grounds of age discrimination. For example, this concession might include a summer day trip organised by the Basset Village Club solely for its junior members under 16 or the reduction of the membership fee for members of more than 40 years’ standing or who are over the age of 65.

4.24 Harassment It is unlawful for an association to harass a person who is seeking membership,53 save EQA  2010 does not apply to harassment based on religion or belief or sexual orientation.54 Harassment takes place in three situations: (a) where it involves unwanted conduct that has the purpose or effect of violating the applicant’s dignity or creating a hostile, degrading, humiliating or offensive environment for the applicant;55 or (b)

where the unwanted conduct is of a sexual nature and has the same purpose or effect as mentioned above;56 or

(c) where the unwanted conduct is of a sexual nature or related to gender realignment or sex and has the same purpose or effect as mentioned above and, as a result of the applicant’s rejection or submission, the other person treats the applicant less favourably than otherwise would have been the case.57 48 49 50 51 52 53 54 55 56 57

Equality Act 2010, s 19(1)–(2). Ibid, s 19(2)(a)–(c). Ibid, s 19(2)(d). Ibid, s 15(1)(b). Ibid, Sch  16, para  1A, added by Equality Act 2010 (Age Exceptions) Order 2012, SI 2012/2466, article 8. Ibid, s 101(4)(b). Ibid, s 103(2). Ibid, s 26(1). Ibid, s 26(2). Ibid, s 26(3).

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4.25  Admission into the Club 4.25 Victimisation It is unlawful for an association to practise victimisation on a person (a) when it comes to the arrangements for deciding whom it will admit to membership;58 or (b) in laying down the terms on which it is prepared to admit a person to membership;59 or (c) by not accepting a person’s application for membership.60 Victimisation takes place where one person subjects another person to a detriment because that other person does a protected act or (according to the former’s belief) has done or may do a protected act.61 A protected act means: (i) bringing proceedings under EQA 2010; or (ii) giving evidence or information in connection with proceedings under EQA 2010; or (iii) doing any other thing for the purposes of or in connection with EQA 2010; or (iv) making an allegation against a specific person that they have contravened EQA 2010.62 The person subjected to a detriment must be an individual rather than a corporate body.63 4.26 Remedies for unlawful discrimination The county court has exclusive jurisdiction to determine a claim for a contravention under the EQA 2010, Part 7, which concerns associations.64 The court must sit with assessors unless the judge is satisfied that there are good reasons for not doing so.65 Proceedings must be brought within six months of the date of the act to which the claim relates or within such other period as the county court thinks just and equitable.66 As to proving the claim, if there are facts from which the court can decide, in the absence of other explanation, that a person about whom a complaint is made has contravened the provision concerned, the court must hold that the contravention did occur unless the person about whom the complaint is made shows that they did not contravene it67 The county court has the power to grant any remedy which can be granted by the High Court in proceedings in tort or on a claim for judicial review.68 An award of damages may include compensation for injured feelings (whether or not it includes compensation on any other basis).69 The county court, however, must not grant an interim injunction or any remedy other than awarding damages or making a declaration unless it is satisfied that no criminal matter will be prejudiced by doing so.70 If the county court is satisfied in a case of indirect discrimination that the offending provision, criterion or practice was not applied with the intention of discriminating against the claimant, the court must not award damages without first considering how else to dispose of the claim.71

5.  Privileges of membership 4.27 Apart from being common practice not to allow a member any privileges until he has paid the entrance fee (if any) and his first subscription, in one instance 58 59 60 61 62 63 64 65 66 67 68 69 70 71

Equality Act 2010, s 101(5)(a). Ibid, s 101(5)(b). Ibid, s 101(5)(c). Ibid, s 27(1). Ibid, s 27(2). Ibid, s 27(4). Ibid, ss 113(1) and 114(1)(d). Ibid, s 114(7). Ibid, s 118(1). Ibid, s 136(2) and (3). Ibid, s 119(2). Ibid, s 119(4). Ibid, ss 114(6)(a) and 119(7). Ibid, s 119(5)–(6).

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Entrance fee and subscriptions 4.30 there is a compulsory requirement for privileges to be deferred. Under the Licensing Act 2003 the club rules must state that a person may not be admitted to membership or, as a candidate for membership be admitted to any of the privileges of membership, without an interval of at least two days between his nomination or application for membership and his admission to such privileges.72 The phrase, ‘at least two days’, means that it covers a period of four days (see 6.12), so that an application for membership received on Monday morning will mean that the candidate or member cannot take advantage of the privileges until Thursday morning at the earliest.

6.  Entrance fee and subscriptions 4.28 Overview Nearly all clubs charge an annual subscription, and perhaps ask for an entrance fee as well, since this is the obvious way of financing the club on a continuing basis. But this is not a requirement of law. In some old-established clubs one will occasionally find that the members do not pay a subscription as such but a levy is made on the members at the end of the club’s financial year to cover the expenses incurred over the previous year.73 The levy can therefore be treated as a kind of subscription, the first year’s expenses being met out the entrance fees or some other capital sum. 4.29 The normal situation is that the entrance fee (if any) and the subscriptions are dealt with in accordance with the club rules.74 If perchance the rules are silent on this matter, the members at a general meeting or, more likely, the managing committee under its delegated powers would deal with this situation. The usual course is for the Committee to put forward or recommend to the members the amounts of the proposed subscription for the various categories of member for the coming year without any input from or consultation with the members. On the other hand, on democratic principles it is important that the Committee is accountable to the members in this matter and that is why one of the invariable items on the agenda at an annual general meeting is the fixing of the entrance fee (if there is one) and the fixing of the annual subscription. If, for example, there is a sharp rise in the subscription rates, the Committee will be obliged to justify their stewardship to the members over the past year which has necessitated the raising of the subscriptions, and this is an exercise to be welcomed. In some large clubs, especially if they contain an element of overseas membership, the members are content to let the Committee decide on the annual rates of subscription. There is, however, nothing untoward in giving the Committee the power (or a temporary power) to raise annual subscriptions by some agreed inflation factor or to increase the subscriptions by a limited amount, say not exceeding 5% of the previous year’s subscriptions. 4.30 Payment by instalments It is not uncommon for clubs to allow members to pay their subscriptions by instalments. The Committee needs to take care that any agreement as to credit is not regulated by the complex provisions of the Consumer Credit Act 1974 (as amended by the Consumer Credit Act 2006). If the payment is to be made by more than 12 instalments or if the member is 72 Licensing Act 2003, s 62(2). This includes temporary members. 73 Oxford colleges, for example, still operate a similar system for their students, called battels, at the end of each term. 74 See the model rules in Appendices K and L.

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4.31  Admission into the Club charged interest on the principal sum outstanding, this will involve the club in obtaining a consumer credit licence. The answer lies in making sure that agreement is an exempt one, that is to say, the credit is for a fixed sum; the repayment instalments do not exceed 12 in number; and the repayment date is within 12 months beginning with the date of the credit agreement.75 4.31 Arrears of subscription This is dealt with in 7.8 under the rubric of lapsed membership. The consequences of arrears should be spelt out in the rules by giving the Committee the power to withdraw or restrict the privileges of membership whilst the subscription is in arrear. A long time ago, under the Literary and Scientific Institutions Act 1854, these institutions were allowed to sue a member who was in arrear with his subscription ‘as a stranger’.76 Further, if a member of these institutions is in arrear with his subscription, the Act says he shall not be counted as a member nor entitled to vote at any meeting of the institution.77 4.32 Waiver of subscription There is, in appropriate circumstances, an implied power to waive the member’s obligation to pay his subscription. In Abbatt v Treasury Solicitor78 Mr Justice Pennycuick, at 569, put the matter thus: ‘I should have thought that where it becomes impossible for the time being to carry on the activities of a club, e.g. as a result of destruction of the club premises, the trustees or committee must have an implied power to suspend or reduce subscriptions; and that if they do so – whether by formal resolution or by conduct – it could not be fairly said that the full subscriptions become due for the purpose of an expulsive provision.’79 4.33 On remission of subscription It might be thought that the remission of a member’s subscription, say because he has fallen on hard times, might be considered simply as a valid act of management or as an acceptable act of kindness on the part of the Committee. But the legal position is not as simple as that. It will be recalled from 1.10 that in a members’ club the consideration for the promise whereby each member agrees to be bound by the rules of the club is the payment of his subscription. Without consideration contracts are not enforceable unless contained in a deed.80 So if the Committee remits on compassionate grounds the whole of the subscription, where is the consideration for the member’s promise to be bound by the club rules for the period of that subscription? Could the excused member say, for example, that he was not bound for that period by any expulsion or suspension rule? We consider that the answer is in the negative because the consideration would probably be construed by courts in a different way. It is normally construed as a detriment to the promisee (the member), the detriment being the payment of the subscription. But consideration may consist of a benefit to the promisor (the club). In Edmonds v Lawson81 the relationship between a pupil barrister (the promisee) and the members of her chambers (the promisor) was held 75 Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, article 60F(2) inserted by Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2013, article 6. It is common to have a repayment date of 360 days. 76 Literary and Scientific Institutions Act 1854, s 25. 77 Ibid, s 31. 78 [1969] 1 WLR 561. 79 This dictum was not overruled or criticised when the case went to the Court of Appeal: [1969] 1 WLR 1575. 80 Chitty on Contracts (33rd edn, 2019) at 4-001. 81 [2000] QB 501.

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Entrance fee and subscriptions 4.35 to be contractual even though she paid no pupillage fee.82 The requirement of consideration was satisfied because it was to the benefit of the barristers’ chambers to have a pool of candidates from which to choose their members. Likewise, it can be cogently argued that it is of benefit to the club to retain an excused member, especially if he is a star player in a sports club or a Committee member in a social club or simply considered a good club member whose presence in the club contributes to its well-being. Thus an excused member is still bound by club rules. Some clubs avoid this problem by giving the Committee the express power to remit the whole or part of a subscription in the exercise of its discretion. 4.34 Refund of entrance fee Problems are sometimes encountered where the club has been dissolved and recently joined members have complained that they are entitled to a refund of the entrance fee in addition to the unexpired portion of the subscription. We consider that no part of the entrance fee is refundable as it comprised the consideration for the ability to join the club in the first place and is in no wise carried forward into the period of membership. But the point may not be free from doubt. In Re Curzon Syndicate Ltd83 one of the members was permitted to prove in the liquidation for the amount of her entrance fee when the proprietary club, the Ladies United Service Club, closed down. But special circumstances may have applied here. In 1917 Mrs H, who was the governing director of the company which owned the club, and who was personally the lessor of the club premises, posted in the clubhouse a notice, in reply to a rumour that the club was going to close down, stating that the club would be carried on permanently. On 25 March 1919 Mrs H obtained judgment against the company for arrears of rent and on the same day closed the club, with the notice still being in place. The law report does not indicate the date when the member paid her entrance fee or the date when she became a member, nor the basis of recovery of the entrance fee. The judge may have come to the conclusion that there was an implied term in any contract of membership entered into after the posting of the notice that the club would not shut down save on reasonable notice. That being so, the company was in breach of the implied term by instant closure, and accordingly the entrance fee was recoverable as an item of wasted expenditure. 4.35 Refund of subscription Another problem of refunding which might occur is if a member resigned because the other members had passed by the requisite majority a fundamental rule change with which he disagreed (see 2.25). Suppose the members of the Basset Constitutional Club had amended their rules to permit women members as well as men. The member had paid his annual subscription a few months before the rule change and he now elects to resign his membership. Can he claim back the unexpired portion of his subscription from the club or its members? Unfair as it may seem, we do not consider such recovery is possible, save in a proprietary club. In a members’ club the will of the majority of the members is paramount. As against the dissenting member the majority could argue that they were not in breach of any term of the contract of membership since the rules gave the members an unfettered power to alter the rules, which power had been correctly, democratically and procedurally exercised in a bona fide manner. This would mean that if the dissenting member wished to resign, that was his undoubted right but such right was exercised of his own volition. And 82 See also Modahl v British Athletic Federation Ltd (No 2) [2001] EWCA Civ 1447, at [50]–[52] (Latham LJ); Re MF Global UK Ltd [2016] EWCA Civ 569, at [26]–[46]; and Bony v Kacou [2017] EWHC 2146 (Ch). 83 (1920) 149 LT Jo 232 (Lawrence J).

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4.36  Admission into the Club this argument might well succeed in court. Nonetheless, we take the view that the club should seriously consider making an ex gratia refund of the subscription or the relevant portion of it. In a proprietary club, however, we consider that there would be an implied term in the contract of membership made between the proprietor and the member that no fundamental change to the rules, which adversely affected the position of the members, would take place during the period of the annual subscription. This implied term is necessary to give business efficacy to the contract and is not unfair on the proprietor since at the end of such period he can alter the rules to suit himself, and this might entail a fundamental rule change not to the liking of the members. If a member does not wish to renew his subscription on these new terms, that is a matter for him, and the contractual relationship between the proprietor and the member will simply cease to exist.

7.  Guests and visitors 4.36 If there is no supply or sale of alcohol or regulated entertainment involved in the club’s activities, the topic of admission of the members’ guests or of visitors into the club’s premises or to its meetings, does not need to be addressed in the rules or bye-laws. The difference between a guest and a visitor in this context is that a guest will be an invitee of the member whereas a visitor will be a member of the public. It will be a matter for the discretion of the committee or the members in general meeting to decide if or when they will admit guests or visitors to participate in the club’s activities and on what terms admission will be permitted. If the club feels more comfortable in regulating the entry of such persons, there is nothing untoward in making bye-laws to cover the situation or insisting that any guest or visitor coming into the club has to sign the visitors’ book or requiring a guest or visitor to pay an entry fee.

Licensing Act 2003 4.37 Guests and licensing laws Where members’ guests are admitted into the club which holds a club premises certificate the sale and supply of alcohol to them is a licensable activity under the Licensing Act 2003. But care has to be taken over the sale and supply of alcohol to guests, visitors and associate members under this Act and this is dealt with in 9.33 and 9.34.

Gambling Act 2005 4.38 Guests and gambling laws Where the club holds a club machine permit or a club gaming permit, genuine guests may be admitted into the club under the Gambling Act 2005 and may use the authorised gaming machines or may participate in the authorised gaming: see 12.26.

Equality Act 2010 4.39 Guests and discrimination laws EQA  2010 affects the admission of guests, visitors and associate members into the club premises, and its provisions are dealt with in 5.75–5.81 as forming part of the club’s management of its affairs. 88

Chapter 5

Management of the Club’s Affairs

1. Introduction 5.1 In the absence of any rule to the contrary all ordinary (ie full) members of a club would have an equal say in the management of an unincorporated members’ club. This form of Athenian democracy is impractical although occasionally found. When the Pre-Raphaelite Brotherhood was founded in 1848 by six artists and a sculptor, this was in effect a club which ran on such lines.1 But in practice a club of any size or longevity cannot function without delegation under the rules of the members’ powers of management to officers of the club and to a managing committee. This is true, whatever the legal nature of the members’ club. As far as proprietary clubs are concerned, it is common for the proprietor to establish a committee to act as an intermediary between him and the members2 since this setup works to the mutual advantage of the proprietor and the members, although as a matter of contract law no such committee is necessary. Sometimes the managing committee is called the executive committee or the general committee, although in many clubs its rules simply refer to the committee.3 To avoid misunderstanding, we will refer to the managing committee or simply to the committee. If the latter, we shall do so with a capital letter, that is, the Committee.4

2.  Officers of a members’ club 5.2 It is normal for clubs to elect officers who have specified functions to perform but very small clubs can survive without them, for example, the PreRaphaelite Brotherhood referred to in the preceding paragraph or the Inklings

1

Its unity of purpose, overtly demonstrated by its logo ‘PRB’, lasted until about 1853 when they all went their own separate ways. 2 Eg Lyttelton v Blackburne (1876) 45 LJ Ch 219 (The Junior Naval and Military Club). 3 The Licensing Act 1964 referred to an elective committee. The Licensing Act 2003, s 64(2) simply requires that the committee be elected. Although elective is a correct use of the adjective, most club members would normally refer to an elected committee. 4 See model rule 23(1) in Appendix K and model rule 11 of Appendix L.

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5.3  Management of the Club’s Affairs referred to in footnote 1 of Chapter 2. Working men’s clubs and community clubs must have officers;5 and company clubs must have directors.6 5.3 Officers of a club fall into two categories: they are either honorary posts or managerial posts. Since the functions of most honorary officers are generally well known it is unusual to specify in the rules precisely what duties their post entails, but if any unusual or specific duties are required of them this should be expressly spelled out. On the other hand, with managerial officers it is good practice to state in the rules or the bye-laws, as and when necessary, what duties the post entails. It is not uncommon in small clubs for one person to hold more than one office, but to dispel any doubts on this point the rules sometimes indicate which offices may be held in tandem. 5.4 Patron The first two definitions of ‘patron’ in the Chambers Dictionary7 are given as ‘[a] a protector; [b] a person, group or organization, etc which gives support, encouragement and often financial aid’. A patron of a club therefore tends to fall into one of two categories: (1) he or she is a person of high rank or eminence who formally supports the objects of the club and acts as its ‘protector’8 but is not a member of the club because this might otherwise impose duties and obligations on the patron which are unacceptable to him or her; or (2) they are a group of members in the club who give the necessary support and encouragement to other members of the club. 5.5 The formal patron commonly holds the post at pleasure. The appointment is usually in the hands of the managing committee and is or should be an uncontroversial appointment. In many clubs, however, a formal patron is considered an unnecessary or inappropriate embellishment and the group of members who comprise the patrons will be the president and vice-presidents. It is not uncommon for the rules to state ‘The club shall be under the patronage of one President and as many Vice-Presidents as the Committee shall determine’. Unlike a formal patron, these patrons will have achieved their presidency or vice-presidency by an election process. 5.6 President The presidency of a club is a non-executive post, unlike the chairmanship of the club which involves managerial functions. We consider that combining the honorary office of president with the managerial office of chairman is incompatible and should not be countenanced. In many clubs the president performs an ambassadorial role, having previously given yeoman service to the club over a period of time. It is the president who will ‘preside’ at important functions such as the annual dinner. At the annual general meeting (‘AGM’) the president, if he attends, will open the proceedings and then hand over to the chairman or secretary to deal with the formal part of the meeting. If the president is to be given any managerial duties, these should be specified in the rules.9 It is usual for a president to be supported by one or more vice-presidents. The vice-presidents

5

Friendly Societies Act 1974, Sch 2, para 5; Co-operative and Community Benefit Societies Act 2014, s 14(6). 6 Companies Act 2006, s 154. 7 Published 2016. 8 In classical Roman times a patron was a patrician who gave legal protection to a client in return for services. 9 For example, the President of the Chartered Institute of Arbitrators, despite his ambassadorial role, is still required to make appointments of arbitrators.

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Officers of a members’ club 5.9 themselves are usually elected to their office for the same reason as the president. They are a useful addition to a club because they form a pool of candidates for the presidency when the need arises and they can deputise for the president when he is absent. Unlike presidents, however, vice-presidents often take part in the running of a club so that, for example, the chairman of the club might well be a vicepresident as well. 5.7 Chairman Unlike all the other officers, the word ‘chairman’ has a masculine connotation and it can be a sensitive issue in clubs. There seems to be no general practice and it is best left to the chairperson to decide how he or she would like to be addressed or described. It is to be noted that section 319 of the Companies Act 2006 is headed ‘Chairman of meeting’ and that the 2008 Model Articles issued under the Companies Act 2006 refer to the chairman, not the chair. If the latter description is preferred, the word will commonly carry a capital ‘C’ to distinguish the person from the item of furniture. In practice, if the chairman or Chair is a woman she is addressed as Madam Chairman. In this book we had to choose one or other word to describe this office in the text and we opted for ‘chairman’ as being the more dignified title. 5.8 One has to draw a distinction here between the chairman of the club and the chairman of the managing committee. Almost invariably they are one and the same person. The chairman of a club is one part of a triumvirate that often ensures that the club operates in an efficient way with the least fuss and bother, the other two members being the secretary and the treasurer. That this triumvirate commonly exists is because the managing committee, into whose hands the control of the club’s affairs has been placed, is usually a much larger body which may well meet on a regular but infrequent basis. The chairman’s main roles are, as the title suggests, the chairmanship of the members in general meeting and the chairmanship of the managing committee. The chairman is the senior and most influential member of the club who takes part in the running of the club and it is not uncommon for the secretary or treasurer (or employees of the club) to consult him about a club matter and, if possible, obtain a decision on the matter. There is nothing untoward about this procedure provided that any decision of substance taken by the chairman is reported to the committee at its next meeting and the chairman’s decision is ratified by the Committee.10 5.9 Secretary This is the officer who generally speaking will be in charge of the day-to-day running of the club.11 In many clubs he will be the honorary secretary. This may sound confusing as he does not hold an honorary office. The word ‘honorary’ in his title means that he receives no remuneration for performing his duties. The secretary has various important administrative tasks: they are to maintain an up-to-date list of members and their addresses and their contact numbers; to collect subscriptions; to deal with club correspondence; to organise and attend general meetings of the club and prepare the agenda and minutes thereof; to liaise between the Committee and the sub-committees; and to prepare a report on the club’s activities since the last AGM and to circulate the same amongst the membership. If the club is a body corporate, the secretary or the person acting

10 See R v Brent Health Authority, ex p Francis [1985] QB 869, at 878. 11 For example, see 5.93 where the secretary is acting as the data controller pursuant to the Data Protection Act 1998.

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5.10  Management of the Club’s Affairs as secretary is the officer personally responsible for the payment of corporation tax by the club.12 5.10 If the secretary is a paid official, he will have a contract of employment in which his duties will be spelled out in the usual way.13 In many clubs, especially golf clubs, a paid secretary is the most prominent figure of authority in the club.14 Although he reports to the managing committee, in practice much of the day-today running of the club will be in his hands. A paid secretary should never be a member of the club because of possible conflicts of interest between his obligations to his employer (the club) and his obligations to his fellow members. 5.11 Treasurer This is an important officer who should keep and maintain the accounts of the club in good order.15 In particular, he is responsible for preparing the accounts for the members at the AGM; this will involve at the minimum a balance sheet and a profit and loss account detailing the income and expenditure over the past year. The treasurer will be answerable to the managing committee during the year leading up to the AGM. The treasurer will normally be an unpaid officer and thus will be the honorary treasurer. However, a big club may have a paid manager or finance director who deals with financial matters or who reports direct to a finance committee or the managing committee, so that the office of treasurer here takes on a more symbolic role. 5.12 In many clubs there needs to be liaison between the secretary and the treasurer to ensure that financial matters are properly handled. The treasurer will be under a duty to bank without delay in the club’s name all moneys received from the secretary. It is the treasurer’s task to see that club moneys are spent solely for club purposes but it is usually the secretary’s duty to organise that payments are made on time, such as the renewal of insurance premiums or the payment of value added tax. If the club is not a body corporate, the treasurer or the person acting as treasurer is the officer personally responsible for the payment of corporation tax by the club.16

3.  Election and tenure of officers 5.13 The president and vice-presidents are elected officers. Sometimes their tenure is annual, sometimes it is for a longer period but, unlike a formal patron, it is not good practice to grant these presidencies for an unlimited duration.17 As to the mode of electing officers generally, practice varies; sometimes it is solely in the hands of the Committee, sometimes it is solely in the hands of the members in general meeting and sometimes it is in the hands of the members but only on the recommendation of the Committee, so that if the recommendation is rejected 12 Taxes Management Act 1970, s 108(1)–(3)(a) (as amended). The officer is entitled to be indemnified by the club: ibid, s 108(2). 13 See Chapter 16 for the topic of employment. 14 Because (a) he is always there; (b) he is not transitory like an elected officer; and (c) he is the person to whom correspondence and complaints are addressed. 15 The treasurer too has duties under the Data Protection Act 1998: see 5.91. 16 This sentence shows an obvious anomaly. For tax purposes the unincorporated members’ club is treated as a company: see 16.14. See the Taxes Management Act 1970, s 108(1)– (3)(b) (as amended). The officer is entitled to be indemnified by the club: ibid, s 108(2). 17 There are some very old established clubs where the President holds office for life.

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Election and tenure of officers 5.16 the members cannot proceed to elect their own candidate but must await a fresh recommendation from the Committee. As for the chairman, in many clubs he is elected by the managing committee from one of its own number immediately after the AGM. In other clubs the nomination for chairman is open to the whole membership and is part of the annual election of the officers and Committee at the AGM. As for the honorary secretary and the honorary treasurer, they are usually officers elected by the members but sometimes the rules stipulate that they too are to be elected by the Committee from amongst its own number. It is important for the rules to be clear on these points. For the election of members of the Committee, see 5.22. 5.14 If the Committee elects an officer from its own number, that committee member, say the treasurer, will remain in office until he is re-elected or replaced by another committee member by the vote of the new Committee after the AGM. The treasurer would continue in office even though he was no longer on the Committee because he was voted off the committee at the AGM or had stood down voluntarily. This is different from an officer who is elected by the members at the AGM. His office will expire at the AGM, at which point he may be re-elected or replaced by another member by the vote of the meeting. 5.15 Nomination Where the officers are elected by the members in general meeting the process of nomination should be dealt with in the rules. In a club of any size there is usually a rule calling for a proposer and seconder, often needing the signed consent of the nominee, and requiring the nomination to be lodged within a certain number of days before the AGM. What happens if there are insufficient candidates to fill all the posts or a particular post such as the treasurership? This is a not uncommon occurrence in small clubs. Can the chairman of the meeting call for nominations from the floor of the meeting? As a matter of practicality we consider the answer to be in the affirmative. This ad hoc nomination may be against the rules but, if successfully voted upon, its legality will rest upon the acquiescence of those members who have attended the meeting and who are thus representing all the members of the club.18 If the office remains unfilled after the AGM, the Committee may have the power under the rules to co-opt a member to that office until the next AGM.19 On the other hand, where the officers are elected by the Committee from its own number, the process of election is often an informal matter which dispenses with the need for a written nomination or a proposer and seconder. 5.16 Voting system A democratic voting system will almost inevitably be a complex affair20 if it is based on the premise that any person elected to an office should have at least 50% of the votes cast. It is of course a relatively simple matter if there are only two candidates, because one of them will normally get more than 50% of the votes. The only difficulty here lies in what happens if there is a tie. The usual solution to this problem is to adopt the solution provided in parliamentary elections, that is, to decide the election by the drawing of lots.21 A contest between two candidates is necessarily run on the basis of ‘first past the post’. The real difficulties arise when the ‘first past the post’ voting system is adopted and the 18 See Prideaux’ Directions to Churchwardens (10th edn, 1835) cited in 6.39. 19 See 5.25. 20 See 6.36. 21 See Representation of the People Act 1983, Sch 1, para 49. In Fryer v Harris (1955) Times, 30 July, where the votes were equally divided, the returning officer spun a coin to decide the election.

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5.17  Management of the Club’s Affairs contest is between three or more candidates. ‘First past the post’ often means (as in our national politics) that a candidate with a minority of votes is elected: a case of the tail wagging the dog. Despite its obvious deficiencies, we consider that for the vast majority of clubs ‘first past the post’ will be a satisfactory voting system because of its uncomplicated nature and the swiftness of the result.22 5.17 Contested elections of officers at general meetings are usually conducted by secret ballot. The secretary should prepare the ballot papers before the meeting with the names of the candidates arranged in alphabetical order. Candidates often prepare a short manifesto (say 150 words) which is circulated prior to the election meeting or sometimes the chairman at the meeting lets each candidate introduce themselves and say a few words in support of their candidature. The vote is taken by each member marking with a cross their choice of candidate on a ballot slip. The vote is then counted by the secretary or the scrutineers if appointed. Where the officers are elected by the Committee from its own number, a secret ballot is desirable if there is to be a contested election for any particular office.

4. Auditor 5.18 If an unincorporated members’ club is of any substance, it is common to appoint an auditor (usually an honorary auditor) to examine and officially verify the accounts of the club. Working men’s clubs and community clubs must appoint an auditor23 (and make rules accordingly)24 although there is now a power for such clubs to opt out of an audit if certain conditions are met.25 Companies must appoint an auditor,26 unless they are private companies which can opt out of this requirement.27 Companies must prepare audited accounts for each financial year,28 unless they are small companies which are exempt from this obligation.29 The auditor has an independent role to play and is not an officer of the club.

5. Trustees 5.19 Where the club is unincorporated and holds assets and property, it is customary for trustees to be appointed according to the rules and for the assets and property to be vested in trustees on trust for the whole membership. Where such a club owns or leases land, this is a necessary requirement because property cannot

22 Another reason for using ‘first past the post’ is the dearth of candidates in club elections. Far from having a surfeit of candidates, many clubs have difficulty in persuading members to become officers of the club. 23 Friendly Societies Act 1974, s  31(1); Co-operative and Community Benefit Societies Act 2014, s 83. 24 Friendly Societies Act 1974, Sch 2, para 6; Co-operative and Community Benefit Societies Act 2014, s 14(10). 25 Friendly Societies Act 1974, s 31(2)–(5); Co-operative and Community Benefit Societies Act 2014, ss 84–86: see footnote 29 for the opt-out figures. 26 Companies Act 2006, ss 485 and 489. 27 Ibid, s 485(1). 28 Ibid, s 475. 29 Ibid, s 477. A ‘small company’ is defined for this purpose as having an annual turnover of not more than £10.2 million and its balance sheet total for the financial year not being more than £5.1 million: ss 322(3), 477(2).

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Control by the managing committee in an unincorporated club 5.21 be conveyed to or registered at the Land Registry in the name of a non-existent person. The trustees will invariably be full members of the club. In the case of a registered working men’s club, there must be one or more trustees appointed by a resolution of a majority of members at a general meeting or in such other manner as the rules provide.30 The appointment must be notified to the Financial Conduct Authority.31 In the case of an unincorporated literary or scientific institution, it is usual for assets and property to be vested in trustees but if none are appointed in respect of personal property, ‘the money, securities for money, goods, chattels and personal effects’ shall be vested in the governing body of the institution.32 Trustees are often appointed where the club is incorporated under the Companies Acts or registered under the Co-operative and Community Benefit Societies Act 2014 but technically this is not necessary because the club is a legal person and can hold assets and property in its own right. The question of trusteeship is further discussed in 8.24.

6.  Branches and sub-clubs 5.20 A national association or a large club, say a multi-sports club, may have one or more branches or sub-clubs. The role of a branch is to represent the parent club in its own locality. The role of a sub-club is to support and implement the objects of the parent club. It is normal for the branch or sub-club to elect its own officers and committee and to manage its own affairs, but with its activities being subject to the ultimate control of the parent club. To this end it is essential that the rules of the branch or sub-club should be compatible with the main rules and stipulate that there shall be an annual report made to the parent club accompanied by an audited financial statement relating to its finances. It is also normal practice for the branch or sub-club rules to state that any assets or moneys held by them shall be and remain in the beneficial ownership of the parent club. In this event these rules should stipulate that the members and officers of the branch or sub-club shall act as fiduciaries to the parent club in respect of such assets and moneys.

7.  Control by the managing committee in an unincorporated club and in a community club 5.21 Overview For the efficient management of an unincorporated members’ club the rules normally delegate to the Committee the control and management of all the affairs of the club. It is therefore essential that the rules specify its composition, and the powers and duties of this committee. Under the Literary and Scientific Institutions Act  1854, if no governing body is constituted on the establishment of the institution, the members themselves shall have the power to create their own governing body.33 In some other cases it is mandatory for the club to have a managing committee. Working men’s clubs and community clubs are required to 30 Friendly Societies Act 1974, s 24(1)–(2) as substituted by the Friendly Societies Act 1992. See, eg Coles v Samuel Smith Old Brewery (Tadcaster) [2007] EWCA Civ 1461 (where the trustees of the Ward Green Working Men’s Club obtained an order for specific performance against the brewery concerning an option to purchase the clubhouse). 31 Ibid, s 24(3)–(4). 32 Literary and Scientific Institutions Act 1854, s 20. 33 Ibid, s 32.

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5.22  Management of the Club’s Affairs have this committee.34 Where the club was the holder of a registration certificate under the Licensing Act 1964, the affairs of the club were required to be vested in such a committee.35 5.22 Election and tenure The election of the Committee is necessarily set out in the rules. If the club held a registration certificate, paragraph 4 of Schedule 7 to the Licensing Act  1964 contained mandatory stipulations about the tenure and election of the Committee. Even with the demise of this Act and the nonappearance of such stipulations in the Licensing Act  2003, we consider that paragraph 4 embodies the best practice and should be followed in any event.36 As to tenure, this may be for not less than one year but should not be more than five years. As to election, this should be held annually, and if all the elected members do not go out of office in every year, there should be fixed rules for determining those who are to retire. All the members of the club, who are entitled to vote at the election and are of not less than two years’ standing, should be capable of being elected, subject to any provision for nomination and any provision prohibiting or restricting re-election. A rule whereby, say, a third shall retire each year can assist the continuity of management. It is usual to permit committee members to put themselves forward for re-election on the expiry of their term of office, subject sometimes to a maximum number of consecutive years which the member may serve in his elected capacity. What is said in 5.15 and 5.16 about nomination and voting relating to the election of officers applies equally to the election of committee members. On the question of non-attendance, it is in order for the rules to authorise the termination of a member’s tenure on the Committee (or sub-committee) due to his substantial failure to attend its meetings. 5.23 Bankruptcy of committee member A  member who is bankrupt should not stand for election to the Committee in an unincorporated members’ club because, although technically eligible, if or when the Committee enters into a contract the bankrupt may not obtain, alone or jointly with another person, credit for more than £500 or engage in business without, in either case, disclosing his bankruptcy.37 A  bankrupt cannot be a company director or take part in the management of a company;38 and these are additional reasons why in a company club a bankrupt should not be elected to the Committee. For the same reasons, a committee member who becomes bankrupt whilst a committee member should stand down from the Committee. 5.24 Sub-committees It is possible for a club to have as many co-equal committees as it wants. But in practice it has been found to be more satisfactory and efficient to have one main committee (the managing committee) with as many sub-committees as may be necessary, which are answerable to the managing

34 Friendly Societies Act 1974, Sch 2, para 5; Co-operative and Community Benefit Societies Act 2014, s 14(6). 35 Licensing Act 1964, Sch 7, para 1. 36 See Appendix C. 37 Insolvency Act 1986, s 360(1), (2); Insolvency Proceedings (Monetary Limits) (Amendment) Order 2004, SI 2004/547. 38 Company Directors Disqualification Act 1986, s 11.

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Control by the managing committee in an unincorporated club 5.26 committee.39 The rules should state that all sub-committees shall conduct their business in accordance with directions from the Committee and that they shall periodically report their proceedings to the Committee for approval and ratification. If decisions made by the sub-committee, for example, those of a disciplinary subcommittee, are to have binding force on the members of the club, it is essential that the rules should spell out this power, emphasising that the decision is being made on behalf of the Committee. It is usual for the rules to provide that members of all sub-committees shall retire automatically on the date on which the AGM is held but to make them eligible for re-appointment by the Committee immediately after the meeting if it sees fit to do so. The point of automatic retirement is that it gives the Committee, whose composition may have substantially changed as a result of elections at the AGM, the opportunity of re-constituting any sub-committee to assist it in the business of running the club. 5.25 Exercise of powers It is important to realise that members are delegating their powers of control to the whole Committee and not to the individual members thereof.40 Consequently it is essential that the rules state that the powers of the Committee may be exercised by a quorate number of the Committee, otherwise any decisions thereof must be taken by the whole Committee.41 Further, because it is an elected body we do not consider that the Committee would have the power to alter its composition without express power being given in the rules. Accordingly, the Committee’s co-option of a member on to the committee to give added weight or expertise or its filling of a casual vacancy on the Committee for the remainder of the term of a committee member, who say has resigned, is not possible without this express power.42 On the other hand, subject to any express rule to the contrary, the Committee will be empowered to determine its own procedures as to how it will operate.43 Pursuant to this power the Committee can appoint a sub-committee or a working party or delegate a task to a particular officer or member of the club. Whenever the Committee adopts procedures which involve delegation, it is crucial that it requires the persons delegated to report their activities to the Committee for approval and ratification, since ultimately the club’s affairs are the responsibility of the Committee and it is they who are answerable to the members. 5.26 Conflicts of interest In exercising its powers the Committee should be astute in spotting potential conflicts of interest. The Committee may decide that the roof of the clubhouse needs substantial repair and a building contractor who is a committee member volunteers to carry out the work for a reasonable price. The conflict arises because it is in the club’s best interest to get the job well done for as low a price as possible and in the building contractor’s best interest to ensure his ‘reasonable price’ is as profitable as possible. Any conflict should be dealt with

39 Licensing Act 1964, Sch 7, para 4(4) stated that a sub-committee shall be treated as an elective committee if its members were appointed by the managing committee and not less than two-thirds were members of the managing committee. The Licensing Act 2003 is silent on the matter so the structure of any subcommittee is a matter for the club rules or constitution. 40 Brown v Andrew (1849) 18 LJ QB 153; R v Liverpool City Council, ex p Professional Association of Teachers (1984) Times, 22 March. 41 See further 6.32. 42 For clubs which held a registration certificate there was statutory power to fill a casual vacancy: Licensing Act 1964, Sch 7, para 4(5). No such power is conferred by the Licensing Act 2003 so this is a matter for the club’s rules. 43 Cassel v Inglis [1916] 2 Ch 211, at 231. See 6.31 as to the effect of members’ resolutions on the Committee’s powers of management.

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5.27  Management of the Club’s Affairs by the Committee either by having a policy of not dealing contractually with any club member or by making sure that all conflicts of interest are properly disclosed and that any decision on the subject matter of the conflict excludes the member when it is taken. In relation to community amateur sports clubs, special statutory provisions apply: a member may supply goods or services to the club or may be in paid employment with the club provided in each case the arrangements are conducted on an arm’s length basis.44 5.27 Intervention by the court regarding internal matters The set of rules which contains the contract between the members is subject to the jurisdiction of the court in the same way as any other contract.45 At one time it was considered that the courts only intervened in club cases to protect rights of property46 but this view has since been rejected.47 But there could still be an important distinction to be made between questions of ethics as opposed to questions of law. We consider that the legal position has much altered in the last half century, as may be seen from the two cases cited below. In Lee v The Showmen’s Guild of Great Britain48 (a trade union expulsion case) in 1952 Lord Justice Romer put the matter thus: ‘Two elements of importance distinguish those [club] cases from this [case]. First, by the rules in the club cases by which the members agreed to be bound it was expressly provided that the test of expulsion was whether “in the opinion of” the domestic forum the conduct of the member warranted it; and, secondly, the decisions on which the intervention of the courts was unsuccessfully sought were questions of ethics and not of law. Such questions are peculiarly within the province of the committee of a social club, and it is now well established that the courts will not interfere even with unreasonable decisions provided the committee have not acted dishonestly or in excess of jurisdiction in arriving at them.’49 It is, however, important to note that since Lee’s case there have been indications of greater willingness on the part of the courts to intervene in the affairs of clubs. This was well expressed in the Scottish case of Wiles v Bothwell Castle Golf Club50 in 2006 by Lord Glennie, whose opinion, we submit, would equally apply in English law: ‘Whatever may have been the position in the past, I consider that it is wrong today to draw a clear line between, on the one hand, trade associations and, on the other, social or sporting clubs; and say that in the former case the courts will be ready to intervene on procedural matters whereas in the latter they will not. It may be necessary to treat older cases on social clubs with caution, recognising that the nature of a social or sporting club may have altered over the years. For many, such a club is not merely incidental to their 44 Corporation Tax Act 2010, s 660(5)(a)(b). 45 Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329, at 341. 46 Lee’s case per Denning LJ at 342; Lyttelton v Blackburne (1876) 45 LJ Ch 219, at 223 (a club case); Rigby v Connol (1880) 14 CH D 482, at 487 (Sir George Jessel MR) (a trade union case). 47 Abbott v Sullivan [1952] 1 KB 189, CA (a trade union case); Amalgamated Society of Railway Servants v Osborne (No 2) [1911] 1 Ch 540, CA, at 562 (a trade union case). 48 [1952] 2 QB 329, CA, at 350. 49 See Dawkins v Antrobus (1881) 17 Ch D 615, CA, at 630 (Brett LJ: a very robust judgment); Young v Imperial Club Ltd [1920] 2  KB  523, CA, at 535 (Scrutton LJ); Hole v Garnsey [1930] AC 472, at 491 (Lord Sumner). 50 [2006] SCLR 108, at [27].

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Control by the managing committee in an unincorporated club 5.30 lives, it has become central. It is often the hub around which their social and business lives revolve. The subscription is often very considerable. Members of such clubs, depending upon the precise rules to which they have signed up, are entitled to be treated fairly by those placed in charge of the dayto-day running of the club and are entitled to expect a certain amount of procedural formality in important matters such as the taking of disciplinary action.’51 5.28 In sum, we conclude that the courts will deal with any breach of a term, express or implied, in the contract of membership, which is alleged to have come about by or through the decision of the Committee, in the same way as they would deal with any other breach of contract. In the event of a non-breach of a term of the contract of membership, the courts do not act as a ‘court of appeal’ from the Committee’s decision52 but even if they can be persuaded to intervene they are unlikely to do so unless there has been some moral culpability where the decision is arrived at from fraud, personal hostility or bias.53 5.29 Vote of No Confidence On occasion there may come a time when the members have lost confidence in their committee to run the club acceptably or properly. This situation needs careful handling if the Committee take the view that, despite what the members generally may think, their stewardship of the club’s affairs is beneficial to the club. It must be remembered that the Committee would have been elected for a finite period and so are entitled to stay in office until the next election. The easy answer therefore is to vote the Committee out of office at the next election. 5.30 But the situation might be such that the members feel that they have to take action prior to the next election. The procedure would be for the members to requisition a special meeting in order to pass a Vote of No Confidence in the Committee and a resolution calling upon the Committee to resign forthwith. It is here that the members may encounter choppy waters. What happens if the secretary or the Committee refuse or simply fail to call the duly requisitioned meeting? The answer is that the requisitionists themselves can convene the meeting.54 But what happens if the Committee then blithely ignore the Vote of No Confidence and the call to resign which, say, had been overwhelmingly passed at the meeting? The answer is for the members to treat the Committee’s refusal to act upon these resolutions as a ground for expulsion from the club. This in turn might produce another procedural hurdle caused by the fact that it is usually the Committee who exercises the power of expulsion. However, the Committee would not be able to exercise the power on this occasion since they would be the accused and the first rule of natural justice is that no-one can act as a judge in his own cause.55 In any event the Committee is ultimately answerable to the general body of members, so in these particular circumstances we consider that the power of expulsion would

51 Lord Glennie now sits in the Inner House, a Scottish appeal court, from which a further appeal may be heard in the Supreme Court of Justice in London. The judge’s citation in his judgment of the Dawkins case (1881) 17 Ch 615 and The Showmen’s case [1952] 2 QB 329 indicates its relevance to English law. 52 Young v Imperial Ladies Club Ltd [1920] 2 KB 523, at 535 (Scutton LJ); Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329, at 341 (Somervell LJ). 53 Richardson-Gardner v Fremantle (1870) 24 LT 81, at 85. 54 See 6.7. 55 See 7.20(1): the requirement for an unbiased tribunal.

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5.31  Management of the Club’s Affairs reside in the members generally who would thus be entitled to convene a special meeting to deal with what would undoubtedly be a critical situation in the club. 5.31 Statutory power to remove the Committee It should be noted that clubs registered under the earlier legislation (that is, working men’s clubs and community clubs) must make provision in their rules for the removal of the Committee as well as rules for appointing it.56 No doubt, as in an unincorporated members’ club, the way of expressing dissatisfaction with the Committee would be the passing of a Vote of No Confidence.

8.  Control by directors in an incorporated club 5.32 Overview All company clubs (which for this purpose includes community interest companies: see 5.40) must have directors57 who will manage the business of the company.58 It is a curious fact that the Companies Acts have never defined the office of director. Section 250 of the Companies Act 2006 states that a director ‘includes any person occupying the position of director by whatever name called’. It is generally accepted that a director is a person who manages the affairs of the company for the benefit of himself and the shareholders or members of the company.59 Most directors will be de jure directors, that is, properly appointed in accordance with the law and the company’s articles. A  few directors may be de facto directors, that is, persons who openly act as directors even though not validly appointed.60 An even smaller number may be shadow directors, that is, persons in accordance with whose directions or instructions the directors of the company are accustomed to act,61 but who disclaim any role as a director.62 5.33 Most company clubs will also have a managing committee, some or all of whom will be directors of the company. Where the membership of the Committee does not coincide with the board of directors a potential problem can arise. Assume there are 12 members of the Committee but only four of them are directors. Will the eight committee members who are not directors be counted as directors? The answer is, alas, not a simple one. For certain provisions, eg insolvency of the company63 or disqualification of directors,64 the answer might be in the affirmative 56 Friendly Societies Act 1974, Sch 2, para 5; Co-operative and Community Benefit Societies Act 2014, s 14(6). 57 Companies Act 2006, s 154. Private companies must have at least one director and other companies must have at least two directors. At least one director must be a natural person: ibid, s 155. It is highly inadvisable for any company club to have a sole director. 58 Article 3 of the Companies (Model Articles) Regulations 2008, SI 2008/3229 and reg 70 of the Companies (Tables A to F) Regulations 1985, SI 1985/805. 59 Re Forest of Dean Coalmining Co (1878) 10 Ch D 450, at 451–452, 453 (Jessel MR) and see the statutory codification in Companies Act 2006, s 172 imposing a general duty, while the company is solvent, to act so as to promote the success of the company for ‘the benefit of the members as a whole’. However, that changes when the company becomes insolvent: see 3.47. 60 Secretary of State for Trade and Industry v Hollier [2007]  BCC  11, at 34 (Etherton J): the touchstone is whether the person in question is part of the corporate governing structure. 61 Insolvency Act 1986, s  251; Secretary of State for Trade and Industry v Deverell [2000] 2 WLR 907, CA. 62 In re Hydrodam (Corby) Ltd [1994] 2 BCLC 180, at 183 (Millett J) (a case of wrongful trading under Insolvency Act 1986, s 214). 63 Ibid. 64 Re Lo-Line Electric Motors Ltd [1988] BCLC 698, at 707 (Browne-Wilkinson V-C).

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Control by directors in an incorporated club 5.36 but it would all depend on the role which the non-director committee member actually played in the club’s affairs. But except in the realm of insolvency of the club, the non-director committee member is very unlikely to be faced with personal liability of any sort arising under company law legislation. 5.34 It is to be noted that, if this particular article is adopted, article 4 of the 2008 Model Articles65 states that the shareholders and members of the company, as the case may be, may by special resolution direct the directors to take, or refrain from taking, specified action. 5.35 Director’s general duties A  director by virtue of his office owes, broadly speaking, two categories of duty towards the company itself: (1) fiduciary duties (that is, duties of good faith and honesty); and (2) duties of skill and care.66 These duties are owed to the company, not to individual members of the club.67 For the first time in the history of English company law the Companies Act 2006 replaced and codified the principal common law and equitable duties of directors. Traditional common law notions of corporate benefit have been cast aside and now the emphasis is on corporate social responsibility.68 In summary the codified duties are as follows: Directors must: (1)

act within their powers;69

(2)

promote the success of the company;70

(3)

exercise independent judgment;71

(4)

exercise reasonable care, skill and diligence;72

(5)

avoid conflicts of interests;73

(6)

not accept benefits from third parties;74

(7)

declare any interest in any proposed transaction with the company.75

5.36 As to the standard of care, skill and diligence to be exercised, the Act lays down a twofold test:76 (1) the director must act with the general knowledge, skill and experience of a person carrying out the functions of that director (the objective test); and (2) the director must bring to bear his actual knowledge, skill and experience when acting as director (the subjective test).

65 See The Companies Act (Model Articles) Regulations 2008, SI 2008/3229 and Appendices G and H. 66 See, generally, Gore-Browne on Companies (45th edn, looseleaf) para 15[1] (2020). 67 Percival v Wright [1902] 2 Ch 421. 68 See eg Companies Act 2006, s 172(1)(d). 69 Ibid, s 171. 70 Ibid, s 172. 71 Ibid, s 173. 72 Ibid, s 174(1). 73 Ibid, s 175. 74 Ibid, s 176. 75 Ibid, s 177. 76 Ibid, s 174(2).

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5.37  Management of the Club’s Affairs Insofar as the Companies Act  2006 does not purport to provide an exhaustive statement of the duties of directors, we cite the decision of Mr  Justice Jonathan Parker in In re Barings plc (No 5)77 where, at 489, he gave a helpful overview of what was expected of a director: ‘(i) Directors have, both collectively and individually, a continuing duty to acquire and maintain a sufficient knowledge and understanding of the company’s business to enable them properly to discharge their duties as directors. (ii)

Whilst directors are entitled (subject to the articles of association of the company) to delegate particular functions to those below them in the management chain, and to trust their competence and integrity to a reasonable extent,78 the exercise of the power of delegation does not absolve a director from the duty to supervise the discharge of the delegated functions [which importantly includes a duty to monitor delegates in the performance of their delegated functions].79

(iii) No rule of universal application can be formulated as to the duty referred to in (ii) above. The extent of the duty, and the question whether it has been discharged, must depend on the facts of each particular case, including the director’s role in the management of the company.’ 5.37 Directors’ financial duties Directors are responsible for ensuring that the company keeps adequate accounting records which disclose with reasonable accuracy at any time the financial position of the company.80 The directors must not approve the annual accounts unless that they are satisfied that they give a true and fair view of the company’s assets, liabilities, financial position, profit or loss, and basic information about the registration of the company.81 The accounts must include a balance sheet as at the last day of the financial year and a profit and loss account but this need not be filed at Companies House if the club is a micro-entity.82 The directors are under a duty to prepare a directors’ report for each financial year of the company83 which must give the names of the directors and state the principal activities of the company carried on in the course of the year.84

77 [1999] 1 BCLC 433. 78 Land Credit & Co of Ireland v Lord Fermoy (1870) 5 Ch App 763, at 771 (Lord Hatherley LC) (a lawful delegation by the board of directors to a committee of directors pursuant to the articles). Where adopted, article 5 of the 2008 Model Rules (entitled ‘Directors may delegate’) states that, subject to the articles, the directors may delegate any of the powers which are conferred on them under the articles to a committee: see Appendices G and H. 79 The words in square brackets were inserted by the Court of Appeal in Hollins v Russell [2003] EWCA Civ 718, at [196]. 80 Companies Act 2006, s 386. 81 Ibid, s  393 as amended by The Small Companies (Micro-Entities’ Accounts) Regulations 2013, SI 2013/3008. See 1.36 for the duties in small companies and micro-entities. 82 Ibid, s  396 as amended by the aforesaid Small Companies (Micro-Entities’ Accounts) Regulations 2013 and the Companies Partnerships and Groups (Accounts and Reports) Regulations 2015, SI 2015/980. 83 Ibid, s 415 as amended by the aforesaid Companies Partnerships and Groups (Accounts and Reports) Regulations 2015. 84 Ibid, s  416 as amended by The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, SI 2013/1970.

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Control by directors in an incorporated club 5.41 Directors are also responsible for safeguarding the assets of the company85 and hence for taking reasonable steps for the prevention and detection of fraud.86 5.38 Conflict of interest between the director and the members There is surprisingly little authority on this point given the opportunities for conflict which might arise. This is no doubt because the board of directors of the company will have overlapping membership with the management committee and they will both be pulling in the same direction. Occasions may sometimes arise, however, where the director’s duties to the company may conflict with his duties to the members as a whole. Take the case of an obstreperous employee whom the members resolve in general meeting should be dismissed forthwith. Against this resolution a director must remember that under section  172(1)(b) of the Companies Act  2006 he is under a duty to have regard to the interests of the company’s employees. In addition, the employee will almost certainly have contractual and statutory rights in connection with his employment, and these rights must be honoured. The director’s duty to the company will weigh equally with his duty to the members.87 If the director were to fail in his duty, the company could look to him for redress. 5.39 Inactive director An inactive executive director must not be confused with a non-executive director. Take the instance of the Duchess of Abercorn in Young v Imperial Ladies Club Ltd,88 who was excused by Lady Samuel, the chair of the executive committee, from attending any committee meeting because she was too busy elsewhere to attend such meetings. Suppose the duchess had been an executive director of the company as well as a committee member. And suppose on the same ground she was excused attendance at board meetings. Could the duchess have relied on this ground to justify non-performance of her duties as a director? The answer is in the negative: the court would judge the director’s performance in accordance with the tests set out in 5.36. 5.40 Community interest company It should be noted that the model articles of association89 of a community interest company (‘CIC’) contain section 8 entitled ‘Directors’ wherein it states, ‘Subject to the Articles, the Directors are responsible for the management of the Company’s business, for which purpose they may exercise all the powers of the Company’. These powers include the delegation thereof; making rules for committees; calling a directors’ meeting and participation therein; the quorum of directors’ meetings and its chairmanship; decisions without a meeting; conflicts of interest; and a register of the director’s interests. 5.41 Protecting the director The answer lies in suitable insurance. The reader is directed to 12.23(1).

85 Selangor United Rubber Estates Ltd v Craddock (No 3) [1968] 1 WLR 1555, at 1575 and see Royal Brunei Airline Sdn Bhd v Tan [1995] 2 AC 378 on the liability to the company of a person dishonestly assisting in such a breach of a trust. 86 In In re Kingston Cotton Mill Company (No 2) [1896] 2 Ch 279, CA, Lopes LJ said, at 288, of a company auditor: ‘He is a watch-dog, not a bloodhound’. A similar remark could be made of a company director. It has elsewhere been remarked that a company director has ‘a duty of curiosity’. See 5.35 and 5.36 for the modern approach to establishing the level of a director’s duty of care and skill. 87 Gaiman v National Association for Mental Health [1971] Ch 317, at 335. 88 [1920] 1 KB 523, CA. See 7.14 for a discussion of this case. 89 See Appendix I.

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5.42  Management of the Club’s Affairs

9.  Control by trustees in a charitable club 5.42 The model constitution90 of an Association charitable incorporated organisation (‘CIO’) contains Section 12 entitled ‘Charity trustees’ wherein clause 12(1) states, ‘The charity trustees shall manage the affairs of the CIO and for that purpose shall exercise all the powers of the CIO’. Whilst the member has no say in the management of the association, they are under a duty as a member to act in good faith and in a manner most likely to further the purposes of the association.91

10.  Control by proprietor in a proprietary club 5.43 The proprietor has full control of the club’s affairs. If he makes provision for a committee, he will spell out what powers of management he is delegating to the committee, including the expenditure of the proprietor’s money.

11.  Cash basis of a members’ club 5.44 As we have seen,92 when a member agrees to join a members’ club, he is agreeing to pay the entrance fee (if any) and the annual subscription but nothing more. Absent any agreement (either within or without the rules) a member does not authorise his fellow members to pledge his credit in any club transaction.93 It follows that the club should operate on a cash basis. In Todd v Emly Mr Baron Parke said:94 ‘The evidence shews that a fund was subscribed, which fund was to be administered by a committee. The committee can only be supposed to have agreed to do that which the subscribers to the club had power to do themselves to do, that is, to administer the fund as far as it went. They were not expected to deal on credit, except for such articles as it might be immediately necessary for them to have dealt with on credit. The making [of] purchases of what was necessary would be only what they ought to do according to the trust reposed in them, and these must be taken to be purchases for ready money, unless distinct evidence was given that they were authorised to enter into contracts on the part of the general body for the common purpose, and to deal on credit, so as to make one the agent of the other. It might be different, perhaps, in the case of hiring the servants of the establishment, where there must necessarily be credit for a certain period, because you cannot pay wages down95 but as to butcher’s meat, wine, furniture, and almost anything else, those may be ready money transactions.’ The cash-basis principle lies at the heart of an unincorporated members’ club because it is the members of the Committee who are liable for the club’s debts, 90 See Appendix J. 91 See Clause 9(3). 92 See 1.10. 93 Flemyng v Hector [1836] 2 M & W 172, at 184 (Parke B) and at 187 (Alderson B). 94 (1841) 7 M & W 427 at 434. The case is further discussed at 13.6. 95 The word ‘down’ means immediately in cash.

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Cash basis of a members’ club 5.47 and they should not be put into the invidious position of financial risk in carrying out their duties, especially as their services are given free of charge for the benefit of the club as a whole. The club should therefore not operate a system of deficit budgeting. In any given year the expenditure should be forecast as accurately as possible and the annual subscription fixed accordingly (taking into account other sources of income such as investments and fund-raising activities). It is the duty of the committee member to keep a vigilant eye on expenditure to ensure that it will be met from existing club funds or from an authorised levy on the members or, if genuinely necessary and prudently entered into, from authorised borrowing such as a bank loan or overdraft. 5.45 Drawing cheques No officer of a club has an inherent right to sign cheques on behalf of the club. It is part of the committee’s function to authorise those officers of the club who may sign cheques drawn on the club’s account, unless the rules or bye-laws deal with this point. It is a sensible precaution to stipulate that all cheques must be signed by two officers of the club, but this can sometimes lead to unwise practices,96 so the practice is now often adopted of permitting a sole signatory on the cheque provided that if the sum involved is in excess of a specified amount the cheque has to be counter-signed by a second signatory. 5.46 Using credit cards Clubs now commonly have the facility of credit cards issued by their bank. It is sometimes overlooked that if the committee members of an unincorporated members’ club enter into a credit agreement for business purposes in a sum not exceeding £25,000,97 this will be a regulated agreement within the Consumer Credit Act  1974 and thus protected by the Act, notwithstanding the facts that the club carries on a business and the credit is advanced for business purposes.98 This situation arises because the Act protects a debtor which is an unincorporated body of persons (as well as an individual) in contrast to a corporate body which does not count as a consumer.99 The credit may be in the form of fixed-sum credit such as a loan or a running account such as a bank overdraft, provided in either case the credit limit of £25,000 is not exceeded.100 Another benefit to an unincorporated members’ club is that, where its committee has paid for goods or services via a credit card and subsequently has a claim against the supplier of goods or services in respect of a misrepresentation or a breach of contract, it will have a like claim against the creditor who supplied the finance.101 Some banks now issue debit cards which carry the same degree of protection as credit cards. 5.47 Levy An extension to the cash basis is the levy. This is a financial contribution sought from members (or a certain class of member) in relation to an 96 Eg one signatory signing all the cheques in blank and then handing over the cheque book to his co-signatory. 97 Consumer Credit Act 1974, s 16B(1)(a), inserted by Consumer Credit Act 2006, s 4, Sch 2, Part II, Examples 7,15 and 19. 98 Chitty on Contracts (33rd edn, 2019) vol 2, at 38–033 and 39-484. 99 Consumer Credit Act 1974, s 8(1), (3) as amended by Consumer Credit Act 2006, s 2(1) (a); and s 189(1) as amended by 2006 Act, s 1(b); The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2013, SI 2013/1881, articles 20 and 60C(3) which re-enacted the £25,000 limit and exempted such an agreement from regulation only if a business loan exceeds that limit. 100 Consumer Credit Act 1974, s 10(1). 101 Ibid, s 75(1).

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5.48  Management of the Club’s Affairs item of expenditure at the club which is independent of the member’s subscription. Associate members and temporary members will be exempt from such a payment. Some clubs dislike the idea of the power to impose a levy being included in the rules; it should be used as a one-off exercise authorised by the Committee as and when the need arises. 5.48 Sinking fund Another exception to the cash basis is the sinking fund. This is a species of Reserve Fund whereby a members’ club raises money for a specific purpose. The club builds up over a period of time a fund from moneys collected from its members and through which it can cover future major works or repairs that occur only once or twice over a lengthy period, for example, the replacement of the clubhouse roof or the installation or repair of expensive sporting facilities. This fund can be established either through the rules or by a special resolution of the club members. It should be noted, however, that if a member leaves the club before the fund is utilised, there is no requirement to refund to the member his contribution to that fund.

12.  Power to borrow moneys 5.49 Unincorporated members’ club These clubs have no inherent or implied power to borrow moneys; this is a concomitant of the club being run on cash basis. Thus either the rules must contain an express power to borrow moneys or all the members of the club must consent to the borrowing in question. If there is an express power to borrow in the rules, it is essential to put some ceiling on the amount which may be borrowed without the consent of the members being first obtained in general meeting. 5.50 Working men’s club and community club Neither of these clubs has any inherent or implied right to borrow moneys. On the other hand, there would be nothing improper in a working men’s club or a community club borrowing moneys if there was an express power in the rules authorising such borrowing in order to carry out the objects of the club. Schedule 2 to the Friendly Societies Act 1974, contains no provision requiring the rules of societies registered under that Act to deal with borrowing but section 23 specifically provides for borrowing by ‘specially authorised’ societies, which category does not include working men’s clubs. On the other hand, under section 14(8) of the Co-operative and Community Benefit Societies Act 2014, the rules of community clubs must contain a provision about whether or not the society may contract loans from members or others and, if so, under what conditions, with what security, and up to what limit of amount. 5.51 Company club In the absence of an express provision in the old-style memorandum or now in the articles, a power to borrow will not be implied ‘unless it be properly incident to the course and conduct of the business for its proper purposes’.102 Thus, generally speaking, any trading or commercial company will have an implied power to borrow moneys so long as borrowing was not prohibited by the old-style memorandum or now prohibited in the articles.103 Insofar as clubs 102 Blackburn Building Society v Cunliffe, Brooks & Co (1882) 22 Ch D 61, at 70. 103 Gore-Browne on Companies (44th edn, 2004) 28[2], now complicated by the Financial Services and Markets Act 2000: see Gore-Browne on Companies (45th edn, looseleaf) paras 28[5]–[7] (2020).

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Power to borrow moneys 5.54 do not exist simply for trade purposes (see the second criterion referred to in 1.1), it is considered that a company club may not have any implied power to borrow money, necessitating an express power. If the old-style memorandum or the articles are silent on the point, the question arises whether the members of the company at a general meeting could pass a special resolution to permit, say, a specific item of borrowing to carry out some lawful transaction. The answer is in the negative because such borrowing would be ultra vires of the company; the company will first have to alter its articles to include a power of borrowing. Therefore the resolution would not become valid even if all the members assented, thus differentiating it from an unincorporated members’ club. We add that, although section 31(1) of the Companies Act 2006 permits unrestricted objects, with the result that the absence of any express power of borrowing would appear to be overcome for the lender, the club has to bear in mind that it must restrict its objects to an agreed and common purpose (see 1.1(1) and 2.37(2)) so that an express borrowing power becomes one of necessity. If the company has express power to borrow, it will also have the power to give security.104 As with an unincorporated members’ club, it is essential to put some ceiling in the articles on the amount which may be borrowed without the consent of the members being first obtained in general meeting. It is also worth pointing out that in order to obtain a company loan a bank will often require a director of that company to give a personal guarantee in respect of the loan, which immediately negates the principle of limited liability. 5.52 Community interest company Article  6 of the model articles of association gives power to the company to borrow or raise money for any purpose in furthering its objects.105 5.53 Charitable incorporated organisation Clause 4(1) of the model Association CIO constitution gives power to the organisation to borrow money and to charge the whole or any part of its property as security for the repayment of the money borrowed.106 5.54 Literary and scientific institutions These institutions have no implied power to borrow for purposes which fall outside the activities described in section 33 of the Literary and Scientific Institutions Act 1854. In Re Badger, Mansell v Viscount Cobham107 the Stourbridge Institute was established for the promotion of literature, science and art. It was managed by a council. At its premises was a much used billiard room and the majority of the council resolved either to build a new room (its preferred option) or to repair the old room, but either course required the borrowing of money. There was no express power in the rules to borrow money. Mr  Justice Buckley held that there was no implied power to borrow money to build a new billiard room since this was outside the purposes contemplated by the Act. He held, however, that under section  19 of the Act the council could call upon the trustees of the property to repair the existing room, in which case the trustees would have a charge on the property for moneys so expended and would be entitled to reimburse themselves if necessary by raising a mortgage on the institute’s premises.108

104 Re Patent File Co [1870] 6 Ch App 83. 105 Appendix I. 106 Appendix J. 107 [1905] 1 Ch 568. 108 See also Re Cleveland Literary and Philosophical Society’s Land [1931] 2 Ch 247.

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5.55  Management of the Club’s Affairs 5.55 Proprietary clubs Any borrowing of money will be the proprietor’s concern.

13.  The committee’s duty of care to the club and its members 5.56 Overview Important questions arise as to what duty of care, if any, the committee members owe to the other members (if the club is unincorporated) or to the club itself (if the club is incorporated). If there is a duty of care, what is its ambit? How far will honesty and good faith be a sufficient discharge of their duties, bearing in mind that the committee members are occupying an unpaid post? How far does the law of agency apply? Are the committee members all jointly liable to the same extent or can the liability vary from member to member? It is rare for the precise relationship between the members and the Committee to be spelled out in the rules. It is equally rare to come across a case where the club has sued its own Committee so that there is a dearth of reported authority on the point. 5.57 It is well established that for the purposes of Part II of the Landlord and Tenant Act  1954 a club is carrying on a business.109 Lord  Reid in Hedley Byrne & Co Ltd v Heller & Partners Ltd110 commented that one of the occasions on which the law imposes a care of duty is when there is a business partnership connection between the parties as opposed to a purely social occasion.111 We consider that in managing the club’s affairs the committee member’s relationship with his fellow members is not simply a social one; for example, he will be responsible (with others) for overseeing the financial welfare of the club. Further, it is self-evident that the committee members in carrying out their functions are not acting merely on behalf of themselves but on behalf of all the other members of the club. Thus the nature and scope of any duty which the Committee may owe to the club becomes a question of agency under the contract of membership.112 An agent acts for a principal. In managing the club’s affairs the first question which arises is who constitutes the Committee’s principal in any given case. (1)

Unincorporated members’ club The difficulty in identifying the Committee’s principal lies in the fact that the club itself has no legal personality. It is tempting to say that the principal is the membership as a whole as opposed to some discrete part of it. But we do not think this reflects the reality of the situation. Owing to the unique and anomalous legal status of this type of club, we consider that the principal could potentially differ with each set of circumstances. Sometimes the principal might be the whole membership, at other times it might be a specific group of members or conceivably it might be a single member. Suppose the members of the Basset Constitutional Club at their AGM discuss and resolve that the club should apply for the renewal of the lease of their clubhouse which is shortly due to expire. Nothing is said as to who should negotiate with the landlord. The Committee thereupon

109 Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513, CA (a tennis club); Coles v Samuel Smith Old Brewery (Tadcaster) [2007] EWCA Civ 1461, at [2] (a working men’s club). 110 [1964] AC 465, at 482. 111 See Chaudhry v Prabhakar [1989] 1  WLR  29, CA, at 35 and 38 and see Hurst v Hone [2010] EWHC 1159 (QB), at [326]–[328] where the existence of a business partnership was discussed. 112 Flemyng v Hector (1836) 2 M&W 172, at 180 (Abinger CB).

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The committee’s duty of care to the club and its members 5.58 undertake the task. Here we surmise that the principal would be the whole membership. Suppose, however, on another occasion the club’s wine committee113 requests the Committee to put in hand the ordering of certain wines chosen by the wine committee for the forthcoming year and the Committee proceed to deal with this task. Here we surmise that the principal would be the members of the wine committee. Or suppose the honorary secretary, as part of his remit of many years’ standing, decides what new crockery and cutlery is required in the club’s dining room but is too busy to deal with the order himself and requests the Committee to deal with this task. Here we surmise that the principal would be the secretary. (2)

Community club Here the simple and correct analysis is that the principal would be the club itself as it has a legal personality.114

(3)

Company club The position is very similar to that of the community club, and the principal would be the club itself. The complication here is that the corporate club will have directors as well as a committee. The directors’ principal will also be the club itself. This duplication of roles can raise a potential conflict which is discussed in 5.38. This position would also obtain with regard to a community interest company. Insofar as the charitable incorporated institution has a corporate personality the position is similar to that of a company club.

5.58 In considering the Committee’s standard of care in any given case one has to take into account the nature of the club and the sort of tasks its Committee is expected to undertake. There is plainly a difference between a club such as the Kennel Club, which is a leading organisation in the canine world, and say the Basset Village Club, which functions as a social club in the local village. The duties of the Committee of the former club will be more various and more onerous than those of the latter club, and no doubt will involve much larger sums of money. As a matter of common sense, too, one would expect a Committee to give more forethought and greater attention to detail if it is concerned with a building project costing a quarter of a million pounds than if it is concerned with guest invitations to the club’s annual dinner dance. On the question of the standard of care of a gratuitous agent, Lord Justice Stuart-Smith in Chaudhry v Prabhakar115 said: ‘Relevant circumstances would be the actual skill and experience that the agent had, though, if he had represented such skill and experience to be greater than it in fact is and the principal has relied on such representation, it seems to be reasonable to expect him to show that standard of skill and experience which he claims to possess. Moreover, the fact that the principal and agent are friends does not in my judgment affect the existence of the duty of care, though conceivably it may be a relevant circumstance in considering the degree or standard of care.’

113 This would normally be a sub-committee but it is common for the word ‘sub’ to be omitted from the nomenclature of sub-committees. 114 It was so held by HH Judge Charles Harris QC in a reserved judgment at the Oxford County Court in Morris Motors Athletic and Social Club Ltd v Fraser (unreported, 20  December 2006), where the claimant was a community club suing its former committee members as its agents. One of the authors acted as counsel in this case. See further concerning this club at 5.60 and 5.61. 115 [1989] 1 WLR 29, CA, at 34.

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5.59  Management of the Club’s Affairs 5.59 Failure or omission to take action might on occasion amount to a breach of the duty of care. Take the case of the club’s leasehold premises, the lease of which is about to expire, mentioned in 5.57(1). Let us suppose that the members in general meeting had specifically authorised the Committee to take steps to obtain the renewal of the lease. Shortly afterwards the landlord serves a Section 25 notice (a notice of termination of the tenancy) which requires the club as lessee to make an application to the court by the termination date asking for a new tenancy.116 The Committee, however, fails to apply to the court either timeously or at all, and the club is unable to oppose the Section 25 notice, thereby causing the club to seek new premises. The members might well have a cause of action against the members of the Committee for any loss or damage caused by their omission to make the necessary application. Therefore it behoves every committee member to attend committee meetings regularly and actively to participate in the running of the club’s affairs. To this end it is a salutary and common rule that a committee member who is absent without an accepted apology from three consecutive committee meetings shall be deemed to have vacated office. 5.60 An illustration of this topic is the unreported case of Morris Motors Athletic and Social Club Ltd v Fraser (2006).117 The claimant, a community club, sued the former members of its committee in negligence for ignoring the advice of the club’s solicitor. The club had entered into an option agreement whereby part of its grounds would be sold to a developer for housing in return for which the developer promised to build a new clubhouse free of charge. The option was exercised by the developer who then required the club under the terms of the option agreement to enter into a tripartite agreement with the local council and the developer. The club’s solicitor initially advised the Committee that the club should not enter into this latter agreement for various technical reasons but eventually advised the Committee that the right course was to sign it because, first, any valid reservations could be taken up with the local council so that the club would in no way prejudice its legal position by entering into the agreement and, secondly, any further delay in signing would inevitably result in court action against the club. The Committee remained unhappy about signing the tripartite agreement and so did not cause the club to do this, whereupon the developer sued the club and obtained a court order compelling it to sign, which resulted in an expensive order for costs being made against the club. And HH Judge Charles Harris QC held the Committee liable in damages in respect of those costs. 5.61 In the Morris Motors Club case all the Committee’s members accepted collective responsibility, but we surmise that this would not always be the case. Suppose one of the committee members had said in committee that it was imperative to sign the tripartite agreement now that the club solicitor had advised this course. And suppose his standpoint had been disregarded by the other committee members who continued to object to signing the agreement. We take the view that the dissenting member would have had a complete answer to the club’s allegation that he had ignored the club solicitor’s advice. Our view is in some measure supported by the case of Todd v Emly118 which is discussed in 13.6. (This divergence of standpoint would no doubt have produced a conflict of interest amongst the defendants in the Morris Motors Club case, requiring the

116 See further 15.16. 117 See footnote 114. 118 (1841) 7 M & W 427 and (1842) 8 M & W 505.

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Members’ personal injury claims against the club 5.64 separate representation of the dissenting member.) Finally, one needs to consider the situation where the committee member plays no active part in the conduct complained of. Suppose in the Morris Motors Club case a committee member was ill or abroad when the solicitor gave his advice to sign the tripartite agreement. Would that member have been able to say that he had no idea that the solicitor had changed his mind about his advice? If he could have established the facts, we consider that this would have been a viable defence. But we take a different view of the committee member who, knowing of the solicitor’s changed advice, attends the committee meeting and simply abstains when the majority continue their objection to signing. This is because of his acquiescence in the ignoring of the advice by the majority of the Committee.

14.  Members’ personal injury claims against the club 5.62 This topic involves the club’s duty of care and needs to be addressed separately. 5.63 Members’ clubs One starts off with the general proposition that at common law neither the managing committee of an unincorporated members’ club nor a corporate members’ club owes any duty in contract or in tort to the member that he will be safe in using the club premises because no member assumes such a responsibility towards his fellow members as an incidence of membership119. As to contract, in Shore v Ministry of Works120 the case (despite its name) concerned the Corsham Community Centre, an unincorporated members’ club. The plaintiffmember was injured by a brick dislodged from the clubhouse roof whilst attending an entertainment at the club and she sued the committee for damages for breach of an implied warranty of her contract of membership that the premises were safe for the purposes for which she was admitted as a member of the club. Her action failed at first instance and on appeal because the court held that the contract contained no such implied warranty. As to tort, in Robertson v Ridley121 the plaintiff was a member of the Sale and Ashton-on-Mersey Conservative Club, an unincorporated members’ club. He was riding his motorcycle on the driveway which led away from the clubhouse when it struck a pothole, as a result of which he fell off and was injured. He brought an action against the chairman and secretary of the club for damages in negligence and lost both at first instance and on appeal because the court held there was no liability at common law on a club or its members for the defective state of the club premises. 5.64 Robertson v Ridley is an example of Homer nodding122 and is of doubtful authority despite being in the Court of Appeal. It is clear from the law report, at 873, that the plaintiff as part of his claim had sued the chairman and secretary for damages for breach of the common duty of care under section  2(2) of the Occupiers’ Liability Act  1957.123 By section  1(1) of this Act the common duty of care took the place of the duty of care at common law. Yet none of the three lords

119 See Charlesworth & Percy on Negligence (13th edn, 2014) at paras 3.52 and 3.53. 120 [1950] 2 All ER 228, CA. 121 [1989] 1 WLR 872, CA. 122 ‘Even Homer nods’. Horace Ars Poetica 359: Indignor quandoque bonus dormitat Homerus. 123 Wrongly categorised by the plaintiff at 873 as a breach of statutory duty. The section is set out in 13.47.

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5.65  Management of the Club’s Affairs justices referred to the 1957 Act or mentioned the phrase, the common duty of care, in their judgments and all three of them relied on cases decided before 1957. It is to be noted that section 1(2) of the 1957 Act says that the substitution of the common duty of care ‘shall not alter the rules of the common law as to the persons on whom a duty is imposed or to whom it is owed’. But that does not answer the question whether the duty of care imposed under the 1957 Act was to be equated with the duty of care (or lack of it) imposed at common law in this particular instance.124 The long title of the 1957 Act said it was an Act to amend the law as to the liability of occupiers and it would seem strange if the two duties of care were synonymous. However, even if the two duties are different, an unresolved question remains whether a club member is a ‘visitor’ to his own club for the purposes of the 1957 Act: see 13.51. Lastly, there is the question as to who counts as the occupier in the case of a club. No problem arises with a community club or company club since it is a legal person, but some difficulty may arise over who constitutes the occupier in the case of an unincorporated members’ club: see 13.48. 5.65 Aside from occupier’s liability, in Prole v Allen125 the plaintiff-member of The Quantock Club and Institute, an unincorporated members’ club, sued the Committee and the club steward in negligence for injuries suffered when at night she fell down some unlighted steps at the exit of the club premises. The steward had switched off the light prior to the accident. The claim failed against the members of the Committee on the ground that they owed the member no duty of care but succeeded against the steward because of the responsibility vested in him by all the members. Mr Justice Pritchard put the matter thus:126 ‘He was appointed by all the members, operating through the committee, and, in my judgment, he thereupon became the agent of each member to do reasonably carefully all those things which he was appointed to do, and in that way he came to owe a duty to each of the members to take reasonable care to carry out his duties without negligence.’ 5.66 In Jones v Northampton Borough Council127 the plaintiff, a member of the Shepherd Social Club, an unincorporated members’ club, sued the council and Mr Owen, who was another member and the chairman of the club, for damages for an injury suffered when playing indoor football. Mr Owen had hired the pitch for a competition and was warned by the council that because of a leak in the roof the pitch contained a pool of water and that he would be entitled to cancel the hiring. Mr  Owen chose to go ahead with the competition and the plaintiff was injured when an opponent slipped in the water and heavily collided with him. Mr  Owen relied on Robertson v Ridley and Prole v Allen but was found guilty of negligence. Lord Justice Ralph Gibson, at 388, had this to say:

124 In Grice v Stourport Tennis, Hockey and Squash Club (1997) CLY 3859 the plaintiff-member in gaining access to the clubhouse slipped and fell thereby injuring his back, and he then sued the unincorporated club in negligence. Pace the decision in Robertson v Ridley, the Court of Appeal allowed the plaintiff to amend his pleading to claim damages against (a) the trustees, (b) the chairman of the ground and premises committee, (c) the steward and (d) two members representing all the other members of the club. This case is unsatisfactory in that it too makes no mention of the Occupiers’ Liability Act 1957. 125 [1950] 1 All ER 476. 126 Ibid, at 477–78. 127 [1990] Times LR 387, CA and official transcript available via Westlaw.

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Children involved in club activities 5.69 ‘The [two] cases relied on by [Mr Owen] were no more than examples of the rule that the mere fact of common ownership of a club, even coupled with membership of a committee on the part of a defendant, did not by itself give rise to a duty of care … No doubt the nature of the relationship between members of a club would [often]128 be such that it would be impossible to find that one member had undertaken any responsibility to inspect, or to enquire, or to consider whether circumstances would or might give rise to a risk of injury. But there might be circumstances in which a member [or officer of the club or a member of the committee]129 acquired knowledge both of the actual danger and of the fact that, if a warning was not given, the members on whose behalf he had undertaken to perform a task would be exposed to a risk of injury. In such circumstances it was open to the court to find that a duty of care existed [to the injured member] and was broken.’ There then ensued the case of Owen v Northampton Borough Council130 which concerned the apportionment of liability for Mr Jones’ injury as between Mr Owen and the council. In his judgment Lord Justice Purchas stated:131 ‘The membership of a club, apart from wholly exceptional circumstances not relevant to this appeal, cannot have the effect of excluding ordinary liability in tort of the Donoghue v Stevenson type once a duty to take care as between neighbours is established.’132 5.67 Protection of the committee and the member Being in breach of the duty of care, whether at common law or under the common duty of care, constitutes the tort of negligence (a civil wrong) and the usual way of protecting tortfeasors against negligence claims is by suitable insurance. And, in unincorporated members’ clubs, whatever may be the legal position, it is plainly desirable that members of the Committee and those members entrusted by the Committee to carry out tasks on its behalf deserve protection from financial liability against personal injury claims made by the club’s own members. 5.68 Proprietary clubs It would appear that, unlike in a members’ club, the owner of a proprietary club does warrant to the member that his club premises are safe to use. This is because the owner will have admitted the member for reward.133

15.  Children involved in club activities 5.69 A  club has always had a duty at law to look after children and young people, whether members or non-members, who participate in club activities.134 There is no doubt that such clubs should have a written child protection policy and clear procedures for responding to child protection concerns, and sports clubs in particular should have a Child Welfare Officer. Under the Safeguarding Vulnerable 128 The Lord Justice added this word in the later case of Owen v Northampton Borough Council (1992) 156 LG Rev 23, CA. 129 See also on p 388 [of the law report]. 130 (1992) 156 LG Rev 23, CA. 131 Ibid, at 31. 132 [1932] AC 562. ‘Neighbour’ is used in a technical sense: see 13.40. 133 Shore v Ministry of Works [1950] 2 All ER 228, at 232 (Jenkins LJ). 134 By virtue of its acting in loco parentis.

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5.70  Management of the Club’s Affairs Groups Act 2006 the Independent Safeguarding Authority (‘ISA’) was established and a Vetting and Barring Scheme was brought into force in 2009. This Act was amended by the Protection of Freedoms Act 2012 and the Government also published The Safeguarding Vulnerable Groups Act 2006 (Miscellaneous Provisions) Regulations 2012.135 The ISA and the Criminal Records Bureau (‘CRB’) were merged into one public body called the Disclosure and Barring Service (‘DBS’). In 2012 the Department of Education published a pamphlet entitled Changes to Disclosure and Barring: What you need to Know. In 2019 the National Society for the Prevention of Cruelty to Children launched a new edition of its booklet, Standards and Guidance Children and Young People aged 0 to 18.136 The published standards are intended to be accessible and easy to use. They deal with: staff and volunteers; child protection and protecting young adults at risk; preventing and responding to bullying; avoiding accidents; and running safe activities and events. These standards are appropriate for clubs as they are aimed primarily at smaller groups and organisations that may have limited resources. The booklet also summarises and encapsulates the current legislation, which is complex. 5.70 Liability for independent contractor Where an organisation is involved with children the Supreme Court has held that this involves a nondelegable duty of care. In Woodland v Essex County Council137 the claimant suffered a severe brain injury during a school swimming lesson owing to the negligence of the swimming teacher who was employed as an independent contractor by the local authority. The court allowed the claim to go forward for trial and laid down the following questions to be considered when dealing with liability: (1)

Was the claimant a child especially vulnerable or dependent on the protection of the defendant against the risk of injury?

(2)

Was there an antecedent relationship between the claimant and the defendant which placed the child into the charge of the defendant?

(3)

Did the claimant have any control over how the defendant chose to perform its obligations?

(4)

Did the defendant delegate its function to a third party and did that function include the care and control of the child?

(5)

Was the third party negligent in the performance of that function?

This duty of care would apply to a club where an authorised club member was employed as an independent contractor in a similar situation.

16.  Discrimination in managing the club’s affairs 5.71 Overview In managing its affairs the club will be bound to comply with the provisions of the Equality Act  2010 (‘EQA  2010’).138 The purpose of

135 SI 2012/2112. 136 2017 Edition (England) available to download from the NSPCC website. 137 [2013] UKSC 66. 138 See Equality Act 2010, ss 142 and 144.

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Discrimination in managing the club’s affairs 5.76 EQA 2010 is to protect certain personal characteristics, such as race and gender, from discrimination. Associations are specifically dealt with in Part 7 (sections 100– 107) and Schedules 15 and 16. Mention of EQA 2010 has already been made in connection with admission into membership of the club: see 4.19. It applies to an ‘association’ as defined in 4.20 (which definition applies to all types of club). The full list of protected characteristics is set out in 4.21. There is a statutory exception to permit the existence of single characteristic associations: see 4.22. Discrimination, harassment and victimisation are explained in 4.23, 4.24 and 4.25. The remedies available for unlawful discrimination are set out in 4.26. 5.72 It is unlawful for a club to discriminate against a member or to victimise that member in the way it affords, or fails to afford, access to a benefit, facility or service which the club provides or by subjecting that member to some other detriment.139 Suppose the Bassetshire Club has a strict dress code that male members are obliged to wear a tie and jacket when dining at the club in the evening. A member suffering from long-term psoriasis (a skin complaint) asks to be excused from this code when he comes to the club for dinner because the wearing of a collar and tie is extremely painful. The club refuses to grant any waiver. This would amount to direct disability discrimination. The club could insist, however, that if a waiver were granted the member should come smartly dressed. 5.73 Associates Similar protection is given to associates.140 An associate means a person who is not a member of the club but in accordance with the club’s rules has some or all of the rights of membership as a result of being a member of another club.141 It is to be noted that a single characteristic association, such as a club for deaf persons, can limit the rights of associates to persons sharing the same characteristic.142 5.74 It is unlawful for a club to harass a member or an associate.143 EQA 2010 does not, however, apply to harassment of members or associates because of their religion or belief or because of their sexual orientation, and concessions to benefit older members are permitted.144 5.75 Guests It is unlawful for a club to discriminate against a person or to victimise that person in the arrangements: (a) for deciding whom to invite, or permit to be invited, as a guest; or (b) in laying down the terms on which it is prepared to invite a person, or permit a person to be invited, as a guest; or (c) by simply not inviting a person, or permitting that person to be invited, as a guest.145 It is to be noted that a single characteristic association, such as a club for deaf persons, can limit the invitation of guests to persons sharing the same characteristic.146 5.76 Following on from that, it is unlawful for a club to discriminate against a guest actually invited by the club or invited with its permission (express or implied)

139 Equality Act 2010, ss 101(2)(a) and (d), 101(6)(a) and (d). 140 Ibid, ss 101(3)(a) and (d), 101(7)(a) and (d). 141 Ibid, s 107(6). 142 Ibid, Sch 16, para 1(2). 143 Ibid, s 101(4)(a) and (c). 144 Ibid, s 103(2) and Sch 16, para 1A added by Equality Act 2010 (Age Exceptions) Order 2012, SI 2012/2466, article 8; see 4.23. 145 Ibid, ss 102(1)(a)–(c), 102(4)(a)–(c). 146 Ibid, Sch 16, para 1(3).

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5.77  Management of the Club’s Affairs or to victimise that guest in the way it affords, or fails to afford, access to a benefit, facility or service which the club provides or by subjecting that guest to some other detriment.147 Examples are given in 5.72 and 5.79. It is also unlawful for a club to harass a guest or potential guest148 save that EQA 2010 does not apply to such harassment based on their religion or belief or their sexual orientation.149 5.77 Gender discrimination in sport EQA 2010 takes account of genderaffected activity, that is to say, sporting competitions where physical strength, stamina or physique are major factors in playing the sport or activity and where one sex would generally speaking be at a disadvantage in comparison with the other sex.150 In these competitions it is lawful for the club to continue to organise separate competitions for men and women.151 The Act also makes it lawful to restrict participation of a transsexual person in such competitions if this is necessary to secure fair competition or the safety of competitors.152 Children in gender-affected activity are a special case. Younger children of both sexes can participate in the same activity; it is for the club to decide whether this is appropriate after taking into account the age and stage of development of the children who are likely to be competitors.153 5.78 Disability discrimination: reasonable adjustments EQA  2010 imposes a duty on a club to take reasonable steps to make adjustments for disabled persons, whether they be members, associates or guests.154 A  disabled person is defined as a person who has a physical or mental impairment and the impairment has a substantial and long-term adverse effect on that person’s ability to carry out normal day-to-day activities.155 Long-term means the effect has lasted at least 12 months; or is likely to last that long; or is likely to last for the rest of the affected person’s life; or is likely to recur.156 Substantial means more than minor or trivial.157 The duty comprises three requirements as follows: (1) where the club’s provision, criterion or practice puts a disabled person at a substantial disadvantage relating to access to a benefit, facility or service, or when invited as a guest, in comparison with persons who are not disabled, the requirement is to take reasonable steps to avoid that disadvantage;158 (2) where a physical feature of its premises159 puts a disabled person at a substantial disadvantage in comparison with persons who are not disabled, the requirement is to take reasonable steps: (a) to avoid that disadvantage; or (b) to adopt a reasonable alternative method: (i) of affording access to the benefit, facility or service; or (ii) of inviting persons as guests;160

147 Equality Act 2010, s 102(2) and (5). 148 Ibid, s 102(3). 149 Ibid, s 103(2). 150 Ibid, s 195(3). 151 Ibid, s 195(1). 152 Ibid, s 195(2). 153 Ibid, s 195(4). 154 Ibid, s 20(2)-(5) and (13) and Sch 15, para 2(2). 155 Ibid, s 6(1)–(2) and Sch 1. 156 Ibid, Sch 1, para 2. 157 Ibid, s 212(1). 158 Ibid, s 20(3) and Sch 15, para 2(4). 159 This includes premises which the club occupies and other premises where the benefit, facility or service is being provided by the club: ibid, Sch 15, para 2(6). 160 Ibid, s 20(4) and Sch 15, para 2(3), (5) and (6).

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Discrimination in managing the club’s affairs 5.80 (3) where a disabled person would, but for the provision of an auxiliary aid, be put at a substantial disadvantage relating to access to a benefit, facility or service, or when invited as a guest, in comparison with persons who are not disabled, the requirement is to take reasonable steps to provide the auxiliary aid.161 A failure to comply with any of these requirements is a failure to comply with the said duty162 and the club thereby discriminates against a disabled person.163 Reasonable steps The Equality and Human Rights Commission in its Guidance (updated on 18  February 2020)164 stated that what is reasonable depends on a number of factors, including the resources available to the organisation making the adjustment. For example, if a club has a number of parking spaces by its clubhouse, it would be reasonable to designate one close to the entrance for the disabled person. We take the view that the availability of resources would include affordability. 5.79 As may be seen, EQA 2010 imposes a duty on the club to make arrangements for proper access to the club’s benefits, facilities and services. Suppose the Basset Music Club with 75 members usually holds its annual dinner in an upstairs function room of a local restaurant. There is no lift to this room. A new member is disabled in that he has severe difficulty in climbing stairs. The club would be under a duty to consider changing the venue to a downstairs room because this would be a reasonable step to take by way of adjustment. On the other hand, if the great advantage of the upstairs function room for the Basset Music Club’s annual dinner was the presence of a fine piano, the playing of which was an integral part of the event, we consider that this fact would excuse the club from altering its venue to a downstairs room which had no piano. The same considerations would apply if members’ guests were invited to this dinner and one of the member’s wives was confined to a wheelchair.165 We add that EQA  2010 tempers the duty by saying that a club is not obliged to take any step which fundamentally alters the nature of the benefit, facility or service in question or the nature of the club itself.166 Also, if meetings of the club take place in a member’s or an associate’s house, there is no obligation on the club to make any adjustment to a physical feature of that house.167 5.80 Finally, a difficulty may arise where the club is occupying its premises under a lease (or licence)168 in that the club may not be entitled under the terms of the lease to make the necessary alterations to the premises in order to comply with its statutory obligations. In such a case the lease shall have the effect as if it provided for the tenant to be entitled to make the necessary alterations with the written consent of the landlord, such consent not to be unreasonably withheld.169 161 Equality Act 2010, s 20(5) and Sch 15, para 2(4). 162 Ibid, s 21(1). 163 Ibid, s 21(2). 164 Available on the Equality and Human Rights Commission’s website. 165 Refusal in the first place to invite the disabled wife of a member to the club’s annual dinner which was open to all members’ partners would be discrimination under Equality Act 2010, s 102(1)(c) if based simply on the fact that she was a wheelchair user. 166 Ibid, Sch 15, para 2(7). 167 Ibid, Sch 15, para 2(8). 168 Ibid, Sch 21, para 2(1)(a), and (3). 169 Ibid, Sch 21, para 3.

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5.81  Management of the Club’s Affairs 5.81 Health and safety EQA 2010 makes an exception relating to pregnant women members in that it is not discriminatory if the club restricts or denies them access to a benefit, facility or service in order to remove or reduce a risk to their health and safety.170 This restriction or denial may be based on the club’s reasonable belief.171 A club may restrict or deny such access to members other than pregnant women based on the same reasonable belief.172 Equivalent provision is made in relation to associates and guests.173

17.  Data protection: privacy and confidentiality 5.82 Overview In conducting its affairs the club will be bound to comply with the provisions of the Data Protection Act 2018 (‘DPA 2018’) of the United Kingdom and the General Data Protection Regulation (‘GDPR 2018’)174 of the European Union. They both came into effect in the UK on 25  May 2018 and replaced the Data Protection Act 1998 (‘DPA 1998’).175 The result is some complex legislation. The purpose of the exercise was to harmonise privacy and data protection laws across Europe and to introduce a new regulatory framework.176 It was to provide protection for people’s personal information and to allow others to use it in accordance with set statutory principles.177 The Information Commissioner has been given extensive powers to administer the UK data protection scheme.178 Enforcement of the rules is mainly conferred on the Information Commissioner, with an appeal to the FirstTier General Regulatory Tribunal, but the courts retain a role in the system under section 180 of DPA 2018.179 5.83 The UK having signalled on 31 January 2020 that it was leaving the EU, it is unclear whether this will result in ‘a deal’ with the EU or will result in a ‘no deal’ (or whatever). On 5  January 2020 the Office of the Information Commissioner announced that leaving without a deal would make little or no difference to the data protection obligations of small- and medium-sized organisations and businesses such as clubs because: ‘The UK is committed to maintaining the high standards of the General Data Protection Regulation and the government plans to incorporate it into UK law after Brexit.’180

170 Equality Act 2010, Sch 16, para 2(3)(a), (4)(a). 171 Ibid, Sch 16, para 2(3)(b), (4)(b). 172 Ibid, Sch 16, para 2(3)(c)–(d), (4)(b)–(c). 173 Ibid, Sch 16, para 2(3), (4). 174 Data Protection Act 2018, ss 1 and 212; The Data Protection Act 2018 (Commencement No 1 and Transitional and Saving Provisions) Regulations 2018, SI 2018/625, reg 2; and General Data Protection Regulation OJL 119, 04.05.2016, cor OJL 127 23.5.2018, (GDPR), article 99. 175 In Campbell v MGN  Ltd [2003] 2  WLR  80, CA, at 100, the trial judge (Morland J) had described the path to his conclusion on this Act as weaving his way through a thicket. 176 ‘The GPDR is a pioneering attempt to create a comprehensive and unified standard for digital privacy and data protection. It is said that, for all its virtues, it does little to question existing models’: quoted from The Peril and Potential of the GDPR published by the Centre for International Governance Innovation, 9 July 2019. 177 Data Protection Act 2018, s 115; GDPR, articles 57–58. 178 Ibid, s 115; GDPR, articles 57–58 (see generally Part 5 of GDPR). 179 Ibid, Part 6 and see the Courts and Tribunals website. 180 See the ICO website at https://ico.org.uk for more detail.

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Data protection: privacy and confidentiality 5.87 5.84 The objective The primary objective of DPA  2018 and GDPR  2018 is to protect an individual’s right to privacy181 and to protect the accuracy of any personal data held by others in a computerised form or in a similarly structured manual filing system.182 5.85 Data protection principles The six principles which govern the processing of personal data are set out in article 5 of GDPR 2018. They may be summarised as follows. All personal data must adhere to the following principles: (1)

lawfulness, fairness and transparency: to be processed fairly and lawfully and in a transparent manner;

(2)

purpose limitation: to be collected for a specified, explicit and legitimate purpose and not further processed in a manner that is incompatible with those purposes;

(3)

data minimisation: to be adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed;

(4)

accuracy: to be accurate and, where necessary, kept up to date; and every reasonable step must be taken to ensure that inaccurate personal data is erased or rectified without delay;

(5)

storage limitation: not to be kept in a form that permits the identification of the data subject for longer than necessary for the purpose for which it is processed, subject to appropriate retention for archiving purposes in the public interest; scientific or historical research purposes; or statistical purposes in accordance with article 89(1) of the GDPR;

(6)

integrity and confidentiality: to be processed in a manner that ensures appropriate security of the personal data.

5.86

Personal data Article 4(1) of GDPR 2018 defines this phrase as meaning:

‘any information relating to an identified or identifiable natural person (“data subject”). An identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person’.183 5.87 Personal data may be processed fairly and lawfully if the data subject has given his consent184 or if the club has a legitimate interest in using or storing the data (for example, a member’s rudeness towards a club employee).185 There are stricter rules for sensitive personal data, which means information as to: the racial or ethnic origin of the data subject; his political opinions; his religious beliefs; his physical or mental health; his sexual life; the commission of any offence by him;

181 The invasion of privacy engages article 8 of the European Convention on Human Rights, viz the right to respect for one’s private and family life, one’s home and one’s correspondence. 182 Durant v Financial Services Authority [2003] EWCA Civ 1746 at [4]; Dawson-Damer v Taylor Wessing LLP [2017] EWCA Civ 74. See also the Explanatory Notes to the GDPD 2018 on the www.gov.uk website. 183 GDPR, article 4(1). 184 Data Protection Act 2018, s 2; GDPR, articles 4(11) and 7. 185 Ibid, s 4(2); GDPR, articles 6(1)(b)–(d) and (f).

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5.88  Management of the Club’s Affairs and his membership of a trade union.186 Sensitive data may be processed fairly and lawfully if the data subject has given his explicit consent187 or if the club has an essential need to use or store the data (for example, a member’s violent behaviour towards a club employee which amounted to a criminal offence).188 Sensitive data may also be processed if the following conditions are satisfied: (a) the processing is carried out in the course of the club’s legitimate activities; (b) the club is not established or conducted for gain and it exists for political, philosophical, religious or trade-union purposes; (c) the processing relates only to club members or to those who have regular contact with the club in connection with its purposes; and (d) the sensitive personal data is not disclosed to a third party without the data subject’s consent.189 5.88 Data processing Data here means information recorded in a form in which it can be processed by computer or other automatic equipment or processed by manual records held in a ‘relevant filing system’.190 Secondly, data means information about a living individual who can be identified from the data, and includes his name and address, his bank details and any expression of opinion about the individual and any indication of the intentions of the data controller191 or any other person in respect of that individual192 (for example, the Committee’s appraisal of the honesty of the club treasurer, or the club’s intention to invite a member to resign his membership on the grounds of his unpopularity). 5.89 Data in a manual filing system An important point to note concerns the accessibility of manual data held in a ‘relevant filing system’. In Durant v Financial Services Authority193 Lord  Justice Auld at [48] had this to say about DPA  1998 in relation to manual records: ‘It is plain … that Parliament intended to apply the Act to manual records only if they are of sufficient sophistication to provide the same or similar ready accessibility as a computerised filing system. That requires a filing system so referenced or indexed that it enables the data controller’s employee responsible to identify at the outset of his search with reasonable certainty and speed the file or files in which the specific data relating to the person requesting the information is located and to locate the relevant information about him within the file or files, without having to do a manual search. To leave it to the searcher to leaf through files, possibly at great length and cost, and fruitlessly, to see whether it or they contain information relating to the person requesting information and whether that information is data within the Act … cannot have been intended by Parliament.’ This judicial pronouncement has the curious effect of seemingly encouraging a club to keep personal data on a casual and haphazard basis as a way of avoiding 186 Data Protection Act 2018, ss 10–11; GDPR, article 9. 187 Ibid, s 2; GDPR, articles 4(11) and 7. 188 Ibid, Sch 9, para 6; GDPR, article 6.1(d). 189 Ibid, s 10, Sch 1, para 31. 190 Ibid, s 21(4). 191 See 5.91 as to who counts as the data controller. 192 Data Protection Act 2018, s 55 and GDPR, article 4(1). Mere mention of the data subject in a document does not necessarily amount to personal data; it has to be information that affects his privacy, whether in his personal or family life or in his business or professional capacity (per Auld LJ, at [28] in Durant’s case). 193 [2004] FSR 28, CA.

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Data protection: privacy and confidentiality 5.92 DPA 2018 and GDPR 2018 but this would only be of assistance to a disorganised club. A properly run club now needs to computerise its records and thus clubs will have to face the fact that DPA 2018 and GDPR 2018 will apply to them. In Johnson v Medical Defence Union194 Mr Justice Laddie dealt with the application of DPA 1998 to documents which, although now in hard copy form, may well have previously been created or held on a hard drive in digital form. He decided that to require the data controller to search for electronic versions of the documents would be too onerous and ruled that the claimant was only entitled to material that was held as data at the time of the access request. That will continue to apply under DPA 2018. 5.90 Exemptions The DPA 2018, within limits set by GDPR 2018, modifies the compliance with the data protection principles required in certain areas of activity where exemptions are granted.195 They include: (1)

national security;196

(2)

crime, taxation and law enforcement;197

(3)

health, education and social work;198

(4)

regulatory activity eg data processed by the Bank of England carrying out its statutory functions; processing relating to legal services or the health service and parliamentary privilege or judicial appointments;199

(5)

journalism, literature and art;200

(6)

research, history and statistics.201

5.91 The controller This means the person who, either alone or in common with other persons, determines the purposes for which and the manner in which any personal data is, or is to be, processed.202 In a club this would normally be the secretary. ‘Processor’ means the person who processes personal data on behalf of the controller.203 5.92 Member’s access to data The club member as the data subject has the following rights relating to personal data:204 (1) to be informed by the data controller whether such data is being processed concerning him;

194 [2004] EWHC 2509 (Ch). 195 See generally Data Protection Act 2018, ss  10 and 11, Schs 1–4 and 6–11; and GDPR, articles 9, 10, 23, 85, 89. 196 Ibid, ss 82–113; GDPR, article 6(1)(e). 197 Ibid, ss 15 and 29–54, Sch 2, paras 1–3. 198 Ibid, s 15, Sch 3; GDPR, article 23(1). 199 Ibid, s 15, Sch 2, Part 2; GDPR, article 23(1). 200 Ibid, s 15, Sch 2, para 26, and s 32; GDPR, article 85(2). 201 Ibid, s 15, Sch 2, paras 27 and 28 and s 33; GDPR, article 89. 202 Ibid, s 6; GDPR, article 4(7). 203 Ibid, ss 6(2), 209 and 210; GDPR, article 4(8). 204 GDPR, article  15; see generally Data Protection Act 2018, ss  1–28. The Information Commissioner can order the data controller to comply with a request for information (ibid, s 149) and the court can issue a search warrant to assist the Information Commissioner to obtain documents as part of the enforcement process: ibid, s 154 and Sch 15; and see Johnson v Medical Defence Union [2004] EWHC 2509 (Ch).

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5.93  Management of the Club’s Affairs (2) if so, to be given: a description of the categories of data concerned; the purposes for which it is being processed; where possible, the envisaged period for which the data will be stored or, where that is not possible, the criteria used to determine that period; and the identity of the recipients of that data (including recipients in other countries or international organisations in which case information about the safeguards relating to the transfer); (3)

to be informed of the source of information available to the data controller;

(4) to request from the controller the correction or erasure of data and to object to such processing and to lodge a complaint with the Information Commissioner’s Office; (5)

to receive a copy of the data so long as the rights and freedoms of others are not adversely affected;

(6) where the processing of personal data is carried out by automatic means (eg  by computer) for the purpose of evaluating matters relating to him (eg his creditworthiness, his reliability or his conduct) and this processing has constituted, or is likely to constitute, the sole basis for any decision affecting him, to be informed by the data controller of the logic involved in that decision-taking. 5.93 Request for data The data controller is not obliged to supply any information unless he has received a request in writing from the data subject and has received a fee not exceeding the amounts prescribed by regulations as he may require.205 Where the data controller cannot comply with the request without disclosing information relating to another individual who can be identified from that information, he is not obliged to comply with the request unless either the other individual has consented or it is reasonable in all the circumstances to comply with the request without the consent of the other individual.206 In assessing the reasonableness of dispensing with such consent the data controller must take into account any duty of confidentiality owed to the other individual. On the other hand, the controller should give the information requested if this is possible by redaction of or omission from the information the name or other identifying particulars of the other individual. An example may help. Suppose at a Committee meeting of the Basset Social Club a committee member proposes under the rules that Peter Gurney, a longstanding member of the club, be co-opted as a committee member but Harry Hawke, the club treasurer, opposes the motion on the ground that Mr Gurney is well-known at the club for being a troublemaker. The proposal is defeated and the matter is fully recorded in the minutes. Mr  Gurney knows from his proposer that his cooption was to be discussed at the meeting. Can he now request the secretary as the data controller to supply him with the information about himself contained in those minutes? The secretary considers that the request is a legitimate one under DPA 2018. Let us assume that Mr Gurney may be a difficult person on occasion but it is wholly unfair and defamatory to describe him as a troublemaker. The proceedings of the Committee are confidential to the committee members so a duty of confidentiality is owed to Mr Hawke. The secretary therefore approaches Mr Hawke to seek his consent to the information contained in the minutes about

205 Data Protection Act 2018, s 12; GDPR, articles 12 and 15. 206 GDPR, article 6(1).

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Membership list 5.96 the co-option being communicated to Mr Gurney, but Mr Hawke refuses to give his consent because he is concerned about his own position. The short answer is that the secretary should supply to Mr Gurney a suitably redacted copy of the minutes or a relevant extract thereof, omitting from the text any reference to Mr Hawke’s name or other particulars which might identify him. Since the confidentiality of the minutes belongs to the whole committee, it would be a wise move on the part of the secretary to consult the Committee before releasing any information to the data subject. 5.94 Notification to the Commissioner Provided the club is processing and storing personal data for its own purposes and does not breach DPA  2018 or GDPR  2018 by providing personal data to outside third parties in breach of those rules, there will be no need for the data controller to notify the Information Commissioner.207 Thus it is thought that a large number of small clubs are effectively exempt from any notification requirement. 5.95 Fees payable Data processing by a club is not subject to a charge by the Information Commissioner’s Office if the processing falls within the definition of exempt processing, which includes processing by ‘a body or association which is not established or conducted for profit and which carries out the processing for the purposes of establishing or maintaining membership or support for the body or association, or providing or administering activities for individuals who are either a member of the body or association or who have regular contact with it’.208 Alternatively, a club with a modest turnover may fall within one of the bands for reduced charges as a micro organisation.209

18.  Membership list 5.96 General membership list The DPA 1998 caused considerable confusion over the ability of a club to compile a list of members for circulation to the general membership. It is clear that on joining a club a member impliedly consents to the club holding his name, address and other contact details as part of a membership list; otherwise the club could not function as such. What is less clear is whether the member impliedly consents to his fellow members having these personal details. We take the robust view that insofar as collegiality is an essential criterion of a club,210 the member does impliedly consent to his fellow members knowing who he is and how he may be contacted; otherwise one might ask why anyone would want to join a club in the first place if he desired to keep this information private.211 A lack of a circulated membership list might on occasion have an adverse effect on the democratic running of the club. Suppose certain members of the Basset Social

207 Data Protection Act 2018, ss 14(4), 50, 67, 108; and GDPR, article 36, for the requirement of notification. 208 The Data Protection (Charges and Information) Regulations 2018, SI 2018/480, reg 2 and Sch 1, para 2. 209 Ibid, reg 3(a). 210 See 1.1. 211 An issue could arise here under article 8 of the European Convention on Human Rights. Names and addresses are in themselves neutral in this context. Their lawful use or disclosure depends on whether they are being used or disclosed in pursuit of a legitimate object and, if so, whether such use or disclosure is proportionate: R (Robertson) v Wakefield Metropolitan District Council [2001] EWHC Admin 915 at [29]–[35] (Maurice Kay J).

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5.97  Management of the Club’s Affairs Club wanted to convene a special meeting to pass a Vote of No Confidence212 in the Committee and under the rules this required a requisition of 30 members. Without a membership list the members’ right to call the meeting might be stultified, especially if the secretary was unwilling to give the aggrieved members any help on this point. 5.97 We therefore consider that there should be a presumption in any club that a membership list will be provided to its members, and we see no reason why this matter should not be dealt with appropriately in the rules.213 If the members were to conclude that there was an unacceptable risk that their confidential membership list, if circulated to all the members, might fall into the wrong hands or there were policy reasons for distributing a restricted membership list, for instance, one which omitted the addresses of junior members, these reservations can be the subject of discussion and, if required, resolutions at a general meeting, or they can be dealt with in the bye-laws. If a list is circulated, this will be on the clear understanding that its contents are protected by DPA 2018 and the GDPR 2018. 5.98 Committee membership list The Committee acts on behalf of all the members in managing the affairs of the club (see 5.21). A principal will obviously be entitled to know who his agent is and how he may be contacted. The name and contact details of a committee member is personal data which is protected in the ordinary course of events. But we consider that the committee member impliedly consents to this data being released to the general membership on his joining the Committee,214 and a committee list should be circulated annually by the club. This consent does not include the release of sensitive personal data, such as the committee member’s sexual orientation, which would require his express consent before being released to the general membership, nor does this consent extend to persons outside the membership of the club. This matter is best dealt with in the rules. 5.99 Membership data on club’s website A website is now a commonplace, useful and, in many ways, economical means of providing information about the club and its activities and of communicating with the members and the outside world. Setting up a website involves registering a domain, web hosting and website designing, none of which comes cheaply. The club’s website will be accessed via the World Wide Web, which is independent of the club and the use of which will be at the user’s risk. Crucially, certain pages of the website, such as membership details, will be only available to club members who will have been issued with a User Name and a Password to login; use of this procedure will constitute an opt-in. The registration data and certain other information about the member will be subject to the club’s privacy policy, which includes compliance with the data protection principles, and the website will be protected by intellectual property rights, including copyright. It will often have links to third party websites. It is important for the club to give notice on its website of the exclusion of liability on its part for any loss or damage arising out of any person’s use of, or inability to use, the website or in respect of any negligent misstatement on the website.215 The club’s liability for defamatory statements published on the club’s website is dealt with in 13.64. 212 See 5.29. 213 See eg Rule 16 of the model rules in Appendix K. 214 Or at any rate sufficient contact details: eg the release of the committee member’s land line telephone number but not necessarily his mobile telephone number. 215 See Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.

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Dealing with internal disputes 5.103 5.100 Company club Under the Companies Act 2006 the company is obliged to keep a register of members216 which is available for inspection without charge by a member of the company and on payment of a prescribed fee by a member of the public,217 in either case pursuant to a request stating the purpose for which the information is to be used.218 The register must contain the name and address of each member219 and, if the company has more than 50 members, it must be indexed.220 The company has the right to go to court to prevent inspection of the register if it asserts that such inspection or the provision of a copy of the list of members is not being sought for a proper purpose.221

19.  Dealing with internal disputes 5.101 Overview Many clubs are anxious that if a dispute arises between the club and its members or between the members themselves which relates to the club’s rules or bye-laws or which concerns the affairs of the club, it should be dealt with privately, and thus the rules make provision for private dispute resolution, usually by mediation or arbitration. Under the rules the mediator or arbitrator may be either an internal or an external appointment. What happens, however, if the aggrieved member ignores the arbitration clause because he wants, say, the publicity of a court case and issues a claim form against the club? The answer is for the club to seek a stay of the court proceedings under section 9 of the Arbitration Act 1996. Such a stay is mandatory unless the arbitration agreement is null and void, inoperative or incapable of being performed. A further point to note is that an individual may waive his right of access to the courts under article 6(1) of the European Convention on Human Rights222 by entering into a contract in which he agrees to submit disputes to arbitration.223 5.102 Unincorporated members’ club The rules must specifically deal with resolution of disputes since a contractual term to exclude recourse to the courts in the event of a dispute will be void on public policy grounds224 unless accompanied by the provision of arbitration. If the rules are silent on the point, no term will be implied into them that the complaint or dispute must be dealt with internally, but the parties may by consent agree to some form of private dispute resolution and if the matter came to court the parties are now required to give consideration to resolving their dispute other than by litigation.225 5.103 Working men’s club Dispute settlement is a mandatory matter for the rules.226 The Friendly Societies Act  1992 put in place substituted provisions

216 Companies Act 2006, s 113(1). 217 Ibid, s 116(1). 218 Ibid, s 116(3). 219 Ibid, s 113(2). 220 Ibid, s 115(1). 221 Ibid, s 117(3). 222 The Human Rights Act 1998 incorporated this convention into UK domestic law. 223 Deweer v Belgium (1979–1980) 2 EHRR 439, at [49]. 224 Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329, CA, at 342 (Denning LJ); Baker v Jones [1954] 1 WLR 1005, at 1010. 225 Halsey v Milton Keynes General NHS Trust ]2004] EWCA Civ 576. See 19.43. 226 Friendly Societies Act 1974, s 7(2) and Sch 2, Part I(9).

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5.104  Management of the Club’s Affairs as to how disputes are to be resolved.227 Disputes shall be resolved by arbitration in the manner directed by the rules and, without derogating from this right to go to arbitration, the club may establish internal procedures for the resolution of complaints or the parties may consent to a reference to an adjudicator for investigation and settlement of the complaint. 5.104 Community club Unlike the Friendly Societies Act 1992, the Co-operative and Community Benefit Societies Act  2014 does not make dispute settlement a mandatory matter for the rules. Instead, the Act regulates the position as follows: if the rules give directions as to the manner in which disputes are to be decided, this procedure must be adopted unless the parties to the dispute by consent refer the matter to the county court.228 Whichever procedure is adopted, any decision on the dispute shall be binding and conclusive on all parties without appeal and shall not be removable into any court of law or restrainable by injunction.229 If the rules direct that the dispute shall be heard by justices in a magistrates’ court, the parties to the dispute may by consent refer the matter to the county court.230 If the rules are silent on the question of dispute settlement, or if no decision on the dispute is made within 40 days after application for a reference under the rules, any party to the dispute may apply to the county court or to a magistrates’ court for a determination of the dispute.231 5.105 Company club The situation is the same as for an unincorporated members’ club: see 5.102. Any provision for resolution of the dispute by some internal procedure or by mediation or arbitration must appear in the club rules or bye-laws or in the articles of association. 5.106 Community interest company The situation is the same as for an unincorporated members’ club: see 5.102. Any provision for resolution of the dispute by some internal procedure or by mediation or arbitration must appear in its articles of association. 5.107 Charitable incorporated organisation Clause 27 of the model constitution of an Association CIO is headed ‘Disputes’ and states: ‘If a dispute arises between members of the CIO about the validity or propriety of anything done by the members under this constitution, and the dispute cannot be resolved by agreement, the parties to the dispute must first try in good faith to settle the dispute by mediation before resorting to litigation.’ 5.108 Community amateur sports club Insofar as this club is either an unincorporated members’ club or a company club, what is said in 5.102 and 5.105 will apply. 5.109 Proprietary club It is a matter for the proprietor to frame a suitable rule dealing with the resolution of disputes between the proprietor and the members. The situation is very similar to that of an unincorporated members’ club: see 5.102.

227 Friendly Societies Act 1992, ss 80 and 81, replacing Friendly Societies Act 1974, ss 76–80. 228 Co-operative and Community Benefit Societies Act 2014, s 137(3) and (7). 229 Ibid, s 140(1). 230 Ibid, s 137(6). 231 Ibid, s 138.

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Chapter 6

Meetings of Club Members

1. Introduction 6.1 The holding of meetings of club members is an essential part of club life: see the sixth criterion (the need for collegiality) backed by the fourth criterion (the need for a set of rules) referred to in 1.1. It is crucial that unincorporated members’ clubs have express rules which adequately deal with the convening and holding of meetings both of the members and of the Committee. In the absence of any express rule, we consider that the members would almost certainly have an implied right to convene and hold meetings1 but this would not be a satisfactory regime under which to function. On the other hand, working men’s clubs and community clubs usually have adequate or sufficient rules covering the topic of meetings because in each case they are obliged by statute to make provision in their rules for the mode of holding meetings and the right of voting.2 Further, members’ clubs incorporated under the Companies Acts in this respect have a distinct advantage over unincorporated members’ clubs in that they are much aided by the detailed procedural rules as to meetings set out in the Companies Act  2006 (see 6.57). As for community interest companies (‘CIC’), their issued rules deal with meetings of directors (articles 13–18) and of members (articles 29–44) and, likewise, as for charitable incorporated organisations (‘CIO’) the constitution of its Association CIO contains rules for meetings of members (clause 11) and of trustees (clause 19).

2.  Annual General Meeting 6.2 Nowadays it is almost unheard of for the rules of a members’ club not to make provision for the holding of an annual general meeting (‘AGM’). It was a mandatory requirement where the club held a registration certificate under the Licensing Act  19643 but this requirement was not carried through to the Licensing Act  2003. The importance of an AGM lies in the fact that it provides the opportunity for the members to receive reports about the club’s activities during the preceding year and to discuss the way forward for the coming year. The main items of business of an AGM are: receiving reports from the secretary 1 2 3

By reason of the sixth criterion (the need for collegiality) referred to in 1.1. Friendly Societies Act 1974, Sch 2, para 4; Co-operative and Community Benefit Societies Act 2014, s 14(5). Licensing Act 1964, Sch 7, para 2(1).

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6.3  Meetings of Club Members and the treasurer; receiving and, if thought fit, approving the club’s accounts for the preceding financial year; electing the officers of the club and members of the Committee; fixing the subscriptions; and transacting the general business of the club. The date of the AGM is often fixed in the rules by specifying an actual date (or sometimes the month) which must not be passed in each year without an AGM having been held. Commonly, too, the rules stipulate that an interval of more than 15 months must not elapse between successive AGMs, and this was a mandatory requirement where the club held a registration certificate.4 6.3 Statutory extension for holding general meetings In the light of the coronavirus pandemic in early 2020, the government passed the Corporate Insolvency and Governance Act 2020 whereby it extended the time for holding general meetings (which includes an AGM) for the period from 26 March 2020 to 30 September 2020, with a possible extension to 5 April 2021.5 The Act applies to clubs within the purlieus of the Friendly Societies Act 1974, the Companies Act 2006, the Charities Act 2011 and the Co-operative and Community Benefit Societies Act 2014.6 It is to be observed that the government, not for the first time, has overlooked unincorporated associations, which would include unincorporated members’ clubs. We take the view that the managing committee of these clubs would be entitled, if they think fit, to defer its AGM on the same basis which applies under the aforesaid statutes, and to do so pursuant to their powers of management and control of the club’s affairs. Despite this parliamentary intervention, it is considered a wise move for clubs to make provision in their rules to give the Committee power to defer its AGM on account of the closure of the clubhouse for the business of meetings, which may or may not recur in the future for whatever reason.7 6.4 Special business Some rules dealing with important matters state that such matters may only be dealt with ‘at a meeting called for the purpose’. Can they be raised at an AGM? The answer is in the negative because an AGM is convened to conduct the general business of the club, that is, those items appearing regularly on the AGM agenda. The doubt can easily be avoided by stating in the rule, ‘at a special meeting called for the purpose’. However, it is common practice nowadays, in order to save time and money, for amendments to the rules, especially noncontentious ones, to be permitted at the AGM provided proper notice is given to the members. In this event, the item on the agenda will be marked ‘Special business’.8 6.5 Any other business The item ‘any other business’ (often abbreviated to ‘AOB’) needs clarification. Its proper use at an AGM is to deal with points arising out of the general business of the club, that is, what has gone before in the other items on the agenda. In addition, the AOB item is a proper opportunity for members to put questions or observations to officers of the club, but it can be disruptive

4 5 6 7 8

Licensing Act 1964, Sch 7, para 2(1). Corporate Insolvency and Governance Act 2020, Sch 14 (see Appendix F). Paragraph 4 of the said schedule gave power to the UK national authorities to make regulations for the purpose of, or connection with, the provisions for meetings. Ibid, Sch 14, para 1. See Appendix K (model full-set of rules) Rule 28(4); and Appendix L (model short-form set of rules) Rule 13(4). See the example given in Appendix M.

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Special meetings 6.8 of the orderly flow of the meeting, so it is in order to have a rule which permits a discussion item under the AOB rule provided that notice of the discussion is given in writing to the secretary, say 48 hours before the meeting. The dividing line between the proper and the improper use of the AOB item is a fine one, and it ultimately falls to the chairman of the meeting to decide where to draw the line.

3.  Special meetings 6.6 These are meetings of the club members which deal with special business, that is to say, meetings which are called for a particular and stated purpose (or purposes) and which, generally speaking, cannot be dealt with at an AGM. Their correct legal name is a special general meeting or, in company law, an extraordinary general meeting (or EGM).9 Most people simply refer to them as special meetings. The only business that can be transacted at a special meeting is that business for which the meeting was called. There will therefore be no AOB item at the end of the agenda. 6.7 Special meetings are convened by order of the managing committee or on the requisition of the members. The rules should stipulate the number of members required for a valid requisition. Where a club held a registration certificate under the Licensing Act 1964, the rules had to specify a number not exceeding 30 or more than one-fifth of the total membership (whichever was the less).10 This provision is not repeated in the Licensing Act 2003 but nevertheless it is considered a good working rule for all clubs. Membership here means ordinary members. If a club has fewer than 150 members, the specified number would necessarily be less than 30; for a club with 100 members a requisition by 20 members would suffice. The question arises whether a requisition can be made orally as well as in writing. Many rules talk in terms of a requisition signed by a specified number, which presupposes a written document. A requisition is a formal demand and it may be doubted whether an oral demand would be valid.11 6.8 Failure to convene In an unincorporated members’ club the question arises as to what happens if the committee fails or refuses to convene a duly requisitioned meeting. In a club which held a registration certificate the rules had to contain a provision that the members, who were entitled to attend and vote at a general meeting, would have the ability to summon a general meeting,12 and we regard such a rule as imperative in all unincorporated members’ clubs. However, in the absence of an express rule we consider that the requisitionists themselves would have an implied right to convene such a meeting, otherwise it would render nugatory their collegiate rights. As a last resort the thwarted requisionists could apply to the court for relief.

9

Regulation 36 of Table A Articles of Association: Companies (Tables A to F) Regulations 1985, SI  1985/805 but in the Companies Act 2006 and The Companies Act (Model Articles) Regulations 2008, SI 2008/3229, the term ‘extraordinary general meeting’ is no longer used. 10 Licensing Act 1964, Sch 7, para 2(3). 11 In the Chambers Dictionary (2016) the first definition of ‘requisition’ refers to a formal demand; the second definition refers to military supply; and the third definition is ‘the written order for the supply of materials’ (emphasis added). 12 Licensing Act 1964, Sch 7, para 2(3). The Licensing Act 2003 contains no such requirement.

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6.9  Meetings of Club Members In a community club the difficulty is surmounted by giving power to the Financial Conduct Authority to call a special meeting upon the application of one-tenth of the membership of a registered society or, in the case of a society with more than 1,000 members, of 100 of those members.13 In a company club and a community interest company (CIC) this difficulty is surmounted by section  305(1) of the Companies Act  2006 giving power to the requisitionists themselves to convene the meeting.14 In a charitable incorporated organisation (CIO) the failure should be reported to the Charity Commission which has the power under section 84(2) of the Charities Act 2011 to order the trustees of the charity to convene the meeting.

4.  Informal meetings 6.9 The Committee may call at any time informal meetings of the members on any topic which is relevant to the expressed objects of the club. It follows that the vast majority of meetings of the members should not be classed as special meetings. For example, an invitation by the Committee to all the members to discuss the club’s blueprint for the better organisation of the club premises can be convened as a discussion group in order to sound out the members about its draft proposals. Generally speaking, it is only when a resolution is proposed to be put before the meeting which will be binding on all the members that the formalities of a special meeting are required.

5.  Notice of general meetings 6.10 Proper notice There are two propositions which govern the convening of a general meeting of the members: (1)

the notice must be given timeously (but see 6.3);15

(2)

the notice must be given to every member who is entitled to attend and vote and who is not beyond summonable distance.16

6.11 To ensure their attendance each member should receive a notice which tells them: (1) the date; (2) the time; (3) the place; and (4) the nature of the business to be discussed or transacted. The rules should specify what length of notice a member will receive in respect of any particular type of meeting. A common period 13 Co-operative and Community Benefit Societies Act, 2014, s 106. 14 The court may on its own application order a meeting to be called: Companies Act, 2006, s 306(2); and see Re British Union for the Abolition of Vivisection [1995] 2 BCLC 1 (where the court permitted proxy voting at a future EGM because the previously held EGM had degenerated into a near riot). 15 Labouchere v Earl of Wharncliffe (1879) 13 Ch D 346. 16 Smyth v Darley (1849) 2 HL Cas 789, at 803 (Lord Campbell LC) (concerning the election of an officer, namely, the county treasurer of the city of Dublin); Young v Imperial Ladies Club Ltd [1920] 2 KB 523, CA, at 536 (Scrutton LJ) (concerning the expulsion of a member of a club); John v Rees [1970] Ch 345, at 402 (Megarry J) (concerning the suspension of a local Labour Party); and Speechley v Allott [2014] EWCA Civ 230 (concerning the election of a club’s officers and Committee).

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Notice of general meetings 6.12 of notice is 14 days for a general meeting of the members and 21 days for an AGM. In Labouchere v Earl of Wharncliffe17 the plaintiff was a member of the Beefsteak Club, who had an altercation with another club member and then wrote a letter and articles about it in his magazine called Truth.18 A general meeting was called by the Committee to consider the expulsion of the plaintiff and the resolution to expel him was carried. The rules required a fortnight’s notice of the meeting. In the member’s action against the club Sir George Jessel MR, at 352, had this to say about the time and manner of giving notice of meetings: ‘In the present instance a meeting of the committee was held on the night of the 31st October, and concluded on the morning of the 1st November. That meeting decided to proceed in a very proper way, both by posting a notice in the coffee-room19 of the club and by sending a circular to each of the members. So far as I am aware there is no common law [precept] for clubs as to the mode in which notices should be issued; and where no [club] rule prescribes a mode, it is within the general functions of a committee of a club to say how notices should be given on each particular occasion. Some matters connected with a club concern only those who habitually use it; and in connection with these matters, the posting of a notice in the coffeeroom or the library is a very sensible plan to follow. But more important matters sometimes [arise] – matters relating, perhaps, to some organic change – matters connected with the general mode of conducting the club – matters connected with the conduct of a particular member; and in such cases it is only right to give notice by circular to those who do not habitually or daily use the club that these matters are coming on for consideration, in order that they may attend and take part in the discussion. When the latter course was adopted, the committee were bound to give a fortnight’s notice. In this case the notice was for 14th November. If it was posted on 1st November, that would not be a fortnight’s notice, and it was posted on the 1st November.’ The judge therefore held that, as the meeting was irregularly called, the committee had no power to expel20 Mr Labouchere. 6.12 The computation of time has given rise to many disputes in the law. Suffice it to say that the general rule is that where the expression ‘14 days’ notice’ is used, the day of service is excluded,21 so the judge in Labouchere’s case was correct in saying the notice was one day short. The rule applies too if the fixed period of time is described as ‘from’ such-and-such a date.22 It is otherwise if the fixed period of time is described as ‘beginning with’ such-and-such a date; here the first day is

17 (1879) 13 Ch D 346. 18 Henry Labouchere was a journalist and radical MP (1880–1906) who famously quipped, ‘I do not object to Mr Gladstone always having the ace of trumps up his sleeve, only to his pretence that God put it there’. 19 Many London clubs for historical reasons still call their dining room the coffee-room. In The Wind in the Willows (published 1908) Mr Toad goes into the coffee-room of the Red Lion Hotel to have luncheon before driving off in another gentleman’s motor-car. 20 See Speechley v Allott [2014] All ER (D) 89, CA. 21 Zoan v Rouamba [2000] 1  WLR  1509,  CA, at  [23], citing Young v Higgon [1840] 6  M  & W 49. 22 Ibid, at [23], citing Goldsmiths’ Co v West Metropolitan Railway Co [1904] 1 KB 1.

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6.13  Meetings of Club Members included.23 If the notice prescribed is one of ‘14 clear days’ or ‘not less than 14 days’, or ‘at least 14 days’, the last day has to be subtracted as well as the day of service when computing the period,24 thus covering a period of 16 days. If the rules are silent on the question of notice, reasonable notice must be given. In company clubs a general meeting of the company must be called by notice of at least 14 days,25 although the articles may prescribe a longer period of notice26 and insofar as AGMs are concerned it would be usual to specify at least 21 days’ notice.27 The Companies Act  2006 has adopted the ‘clear day’ rule for the notice of general meetings.28 And the issued rules of both the CIC and the CIO have adopted a rule which says, ‘at least 14 clear days’ notice’.29 6.13 The omission to give due notice of a meeting to even one member of a body, who is entitled to attend and vote30 at the meeting and who is not beyond summonable distance, renders invalid the meeting and any decision thereat.31 It is therefore a wise precaution to send out as a matter of course notice to all members whether or not they are thought to be within summonable distance. An invalid decision may in some circumstances be acquiesced in32 or ratified33 or the omission may be excusable.34 6.14 Non-receipt of notice If the two propositions referred to in 6.10 were to be applied in their full rigour, this could be very inimical to organising valid meetings. First, although a member might well have a legitimate grievance if he did not receive, or received too late, notice of an important meeting, we consider that any request for the meeting to be reconvened should be refused if (a) the meeting was otherwise quorate; and (b) the managing committee is satisfied that neither the aggrieved member’s attendance at the meeting nor his vote thereat would have affected the outcome of any decision taken or any resolution passed.35 Upon refusal the member’s remedy would be to seek a court declaration that the meeting was invalid, an expensive and fruitless exercise if on reconvening the meeting the same result occurs. Secondly, the best and usual way of avoiding the consequences of failure to comply with these two propositions is to have the following express club rules:

23 Zoan v Rouamba [2000] 1 WLR 1509, CA, at [24], citing Hare v Gocher [1962] 2 QB 641; and see Mucelli v Government of Albania [2009] UKHL 2 (‘starting with the day’). 24 R v Turner [1910] 1 KB 346, CA, at 359–360. 25 Companies Act 2006, s 307(1). 26 Ibid, s 307(3). 27 For public companies the AGM notice must be for at least 21 days: ibid, s 307(2)(a). 28 Ibid, s 360. 29 CIC: article 30.1; CIO: clause 11(3)(a). 30 So that members without votes, such as honorary or junior members, need not be notified. 31 Labouchere v Earl of Wharncliffe (1879) 13 Ch D 346. 32 Abbatt v Treasury Solicitor [1969] 1 WLR 1575, CA, at 1583. 33 In re Sick and Funeral Society of  St  John’s Sunday School, Golcar [1973] 1  Ch  51, at 57 (Megarry J). 34 Young v Imperial Ladies Club Ltd [1920] 2 KB 523, CA, at 536. 35 If more than one member is complaining about breaches of the two propositions, the Committee must of course consider the cumulative effect of the absence of such members from the meeting.

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Notice of general meetings 6.16 (1)

a rule which states that a sent notice shall be deemed to have been received by the member within a specified time of it being sent or delivered by whichever means was used by the club;36

(2) a rule which states that the accidental omission to give notice to one or more persons entitled to receive notice shall not invalidate the proceedings of the meeting in question. Company clubs can rely on section 313 of the Companies Act 2006, which states that the accidental omission to give notice to one or more persons entitled to receive notice shall be disregarded. 6.15 Postal and electronic service The world has moved on and whereas in the past notice of meetings was always given in a hard copy form by post or personally, technological advances have decreed that electronic communication is the order of the day. The recognition of this state of affairs was reflected in the Electronic Communications Act 2000. The Companies Act 2006 laid down a new regime for notification of company meetings which we consider should be universally adopted for club meetings: (1)

Section 308 states the general rule. Notice of a general meeting of a company must be given: (a) in hard copy form, or (b) in electronic form, or (c) by means of a website

or partly by one such means and partly by another. (2)

Section 1168 elaborates on the general rule: (a) a document is sent in hard copy form if it is sent in a paper copy or similar form capable of being read; (b) a document is sent in electronic form if it is sent by electronic means (eg by e-mail or fax) or by some other means while in an electronic form (eg sending a disk by post); (c) the recipient of a document in electronic form must be able to retain a copy of it; (d) any sent document must be capable of being read with the naked eye; (e) to the extent that any document consists of images (eg  photographs, pictures, maps, plans and drawings), the image must be capable of being seen with the naked eye.

6.16 It is, however, a cardinal principle that neither the club nor the member can be compelled to communicate electronically if they do not wish to do so. There must be mutual agreement. However, there is no doubt that electronic communication is not only much cheaper than postage but it is also swifter and absolves the secretary from a tedious administrative chore in preparing and sending out letters. If electronic means of communicating notice of meetings is intended to be used in members’ clubs, the rules must make specific provision for this. We 36 On the other hand, a deeming provision might on occasion convert a valid notice into an invalid one so that the rule should add ‘unless the contrary is shown’: Barclays Bank of Swaziland Ltd v Hahn [1989] 1 WLR 506, HL.

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6.17  Meetings of Club Members add in parenthesis that by adding this facility the club does not preclude itself from communicating with its members by post or other means if it so wishes. Indeed, the rules need to cater for persons who do not have access to a computer, either by choice or for some other reason; otherwise the club will be impliedly stipulating that only those persons with a computer will be eligible for membership, and this is wrong in principle. On the other hand, there is nothing untoward in the rules stipulating that if a member wishes to be contacted by the postal service to the exclusion of other means he must give express written notice of this fact to the secretary. 6.17 There are two means other than by hard copy by which documents can be made available to members: (1) by placing them on the club’s website; and (2) by sending them electronically to the individual member. In adopting the first method the club will be offering to e-mail to members a hyperlink to web pages containing the document. In this event the club must decide the format to be used. If a document is posted to a website it should be available in basic HTML format so it can be read by the member’s browser. In adopting the second method the club’s usual method will be to e-mail the document by way of attachment. In this event the attachment should be in a technology likely to be available to members, such as Microsoft Word or an Adobe pdf file. 6.18 Any e-mail address, telephone or fax number or any other ‘address’ supplied by the member for the transmission of electronic communication is normally protected by the Data Protection Act  2018 and the European Union’s General Data Protection Regulation 2018 and this is not the subject of any statutory exemption. The address should therefore not be released to third parties without the consent of the member37 or pursuant to some statutory authority.38 6.19 It is perhaps necessary to point out that electronic communication, even where authorised by the rules, may not be the appropriate means of communication in particular circumstances. For example, if the club wished to investigate a complaint of serious misconduct made against a member, it would be very unwise to communicate with the member otherwise than by a posted letter marked ‘private and confidential’. Likewise, it is considered good practice that when an important matter is to be discussed by the members either at the AGM or at a special meeting, especially where it involves the scrutiny of documents, communication should be made via the postal service.

6.  Electronic meetings 6.20 The coronavirus pandemic39 in 2020 brought forward the need for electronic meetings which will inevitably replace face-to-face meetings whilst the pandemic lasts, and will no doubt continue as a current form of meeting once

37 See 5.87. 38 See eg 5.90. 39 The World Health Organisation (WHO) named this particular coronavirus disease as Covid-19.

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Controlling attendance at meetings 6.22 the pandemic has desisted. This situation means that the club rules will require amendment to authorise electronic meetings.40 A commonly used platform is the now familiar Zoom tool41 and guidelines as to its use are easily accessed on the Internet. The meeting is ‘hosted’ either by the Chairman or, possibly more realistically, the Secretary or other club official. The Chairman satisfies himself that there is a sufficiency of members ‘attending’ to constitute a quorum. That is not a problem because the Zoom facility has in a side bar a list of all those who are ‘signed in’, and everyone who is ‘attending’ can see it. In addition, at the bottom of the screen there is a counter which shows the number present throughout the meeting. The procedure for the meeting is then followed in exactly the same manner as would obtain in a face-to-face meeting. There may in fact be certain advantages in holding an electronic meeting. Members can attend who might otherwise have been unable to do so. The Chairman can call on an individual member to speak, and this person can be heard by the rest because the Chairman using the facility built into Zoom mutes the microphones of these others. The person speaking can clearly be heard by all, even those hard of hearing who might have difficulty in a large hall, as the speaker’s face is visible on the screen and the listener can adjust the volume of the speaker on his own device. A member wishing to contribute uses a hand icon at the bottom of his screen which comes up as a similar icon on the screen of the Chairman – and indeed on the screen of all others who have that member on their screen at the particular time. The Chairman can select that member to speak and, when he does so, the member immediately appears on the screen of all those attending. Achieving a quorum is thus more easily achieved. The Chairman will deal with any point of procedure, adjournment, amendment or resolution in the same way as in any other meeting, and voting is accomplished by the use of the hand icon, either to register a show-of-hands or to conduct a poll. 6.21 Also, transacting some of the club’s business by way of written resolutions as permitted under company law (see 6.57 and 6.59) will obviate the need for faceto-face meetings because the whole process can be conducted via an electronic meeting, and the procedure will come under the amended rules referred to in 6.20.

7.  Controlling attendance at meetings 6.22 Here one must draw a distinction between private meetings of the club members and those meetings to which non-members or strangers are invited. In the latter case it is for the club to decide whom it shall invite, bearing in mind the rules of the club and, if applicable, the provisions of the Licensing Act 2003. Any particular stranger to whom the club objects, say a photographer from the local

40 See Rule 31 of the model full set of rules (Appendix K) and Rule 16 of the model short-form rules (Appendix L). 41 Zoom is a web-based video-conferencing tool which allows people to meet online with or without video. Up to 100 participants can be accommodated on the free package, and up to 500 on a chargeable add-on. Skype for Business is a further communication tool often used for business meetings.

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6.23  Meetings of Club Members press, may be requested to leave and, if he refuses to go, he becomes a trespasser who may be ejected with the minimum of force as is reasonably necessary.42 6.23 Strangers have no right to attend private meetings of the club members and may only do so provided no objection is taken to their presence. Any objection to the presence of a stranger should be taken as a point of order at the outset of the meeting before any item on the agenda is discussed. Suppose the point of order is upheld by the chairman: is that the end of the matter? We consider that the answer is in the affirmative, even if the objection is made by one person only. The valid point of order should not be overruled by a consensus of the meeting, however large, expressing its desire for the stranger to remain. On the other hand, at a private meeting of the club, eg  a meeting of the managing committee, its members could discuss as an item on the agenda whether to invite a stranger to attend a future private meeting for a particular purpose, for instance, an invitation to a solicitor to attend a committee meeting in order to give them advice and to answer questions about a problematic club trust fund. If this item were passed, the solicitor’s subsequent attendance would not give rise to any point of order. 6.24 A member who is entitled to attend a meeting may not be suspended or expelled from a meeting, however truculent he is, provided his behaviour is not disorderly and does not obstruct the due processes of the meeting.43 If the member is guilty of disorderly conduct he may temporarily be excluded or removed from the meeting, or he may be expelled therefrom.44 It is one of the chairman’s duties to oversee this aspect of the meeting: see 6.27(b).

8. Agenda 6.25 The agenda for a general meeting is normally prepared by the secretary. A  specimen agenda for an AGM may be found at Appendix M. Formal motions which are proposed to be put to the meeting should be set out in full; this is especially important if the agenda is for a special meeting because it will have been called for a particular purpose. If a member wishes to propose another item on the agenda of a general meeting, the rules should specify the required length of notice to be given to the secretary, usually at least 14 days before the meeting. It is improper to depart from the order in which the items are set down in the agenda unless a majority of the meeting agrees to the contrary.45 An agenda for an AGM should also have an item ‘Matters arising’, that is to say, arising out of the minutes of the last AGM. The agenda for a committee meeting is sometimes prepared by the secretary, at other times by the Committee chairman. It is good practice to try to keep the committee agenda running in the same order from meeting to meeting.

42 R v Chief Constable of Devon and Cornwall, ex p Central Electricity Generating Board [1982] 1 QB 458, CA, at 478. 43 Barton v Taylor (1886) 11 App Cas 197, at 204 (concerning the New South Wales Assembly). 44 Doyle v Falconer (1865–1867)  LR  1  PC  328, at 340 (concerning Dominican Legislative Assembly). 45 John v Rees [1970] Ch 345, at 378.

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Chairman of meetings 6.27

9.  Chairman of meetings 6.26 The Chairman of the club by virtue of his office is the correct person to chair general meetings of club members. What happens in the absence of the duly appointed chairman? In all clubs one first has to look in the rules or byelaws as to what, if anything, is said about the chairmanship of meetings. If the rules and bye-laws are silent and the chairman is absent from the meeting, the first task of the meeting will be to elect a chairman from those members present at the meeting. Commonly it is the secretary who deals with this situation; he should seek the nomination of a senior and respected member whom he thinks will control the meeting properly. This person does not necessarily have to be an officer of the club or a member of the Committee. Once elected as chairman of the meeting, that person does not automatically cease to be the chairman if perchance the designated chairman were later to arrive at the meeting. This would depend on how far the meeting had progressed; in its early stages he might well stand down. In company clubs this matter of chairmanship is regulated by statute. Section 319 of the Companies Act  2006 states that a member may be elected the chairman of a general meeting by a resolution of the company passed at that meeting but that this power is subject to any provision in the articles dealing with this topic. In existing companies formed before 1 October 2009 the question of chairmanship is dealt with in regulations 42 and 43 of the Table A Regulations46 and in companies formed on or after 1  October 2009 this question is dealt with in article  39 for companies limited by shares and in article 25 for companies limited by guarantee, each under their respective 2008 Model Articles.47 The issued rules of both the CIC and the CIO have adopted rules which deal with the chairmanship of general meetings.48 6.27 Chairman’s duties The duties cast upon a chairman of a meeting are not only important but must be properly exercised to ensure a well-conducted meeting, remembering Mr Justice Megarry’s dictum that, ‘Above all, [the chairman’s] duty is to act not as dictator but as a servant of the members of the body, according to law’.49 The chairman’s duties may be summarised as follows: (1)

to check that the meeting has been properly convened;

(2)

to ensure that a quorum of members is present;

(3)

to welcome such guests or visitors as are permitted at the meeting;

(4) to adjourn the meeting to a larger meeting place if the chosen place is too small to accommodate the members present (if one is available)50 or to

46 SI 1985/805. 47 Companies (Model Articles) Regulations 2008, SI 2008/3229. 48 CIC: article 35; CIO: clause 11(4) (Association model). 49 John v Rees [1970] Ch 345, at 377. 50 In Byng v London Life Association Ltd [1990] Ch 170, CA, at 182, the court held at 183 that for a meeting to be validly constituted it is not necessary for all members to be physically present in the same room provided that proper audio/visual aids are used to enable the members in any overflow room to participate in the meeting.

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6.28  Meetings of Club Members adjourn the meeting to a later date at a different venue or, if necessary, to abandon the meeting;51 (5) to keep order and, if possible, to restore order if disorder breaks out and, in the latter event, to adjourn the meeting either for a short time or generally if his efforts to restore order are in vain;52 (6) to remain impartial throughout the meeting, and to stand down if he has a personal interest in the outcome of any motion; (7)

to rule on a point of order;53

(8)

not to alter the order of the agenda unless a majority of the meeting agrees to this course;54

(9)

not to introduce a motion of his own which is not on the agenda;55

(10) to see that speakers address the chair56 and that questions are asked through the chair; (11) to deal with amendments to motions in the correct order;57 (12) to ask the secretary, or he himself, to read out the precise motion which is being put to the meeting to be voted on; (13) to oversee that voting procedures are conducted properly; (14) to appoint tellers or scrutineers for the counting of votes; (15) to declare the result of any vote on a motion. 6.28 Adjournment Normally the power of adjournment is vested in the meeting.58 The chairman cannot adjourn the meeting without its authority and, if he does so, the meeting may continue with a different chairman if necessary. However, at common law the chairman has the power to adjourn in appropriate circumstances: see items (4) and (5) of 6.27. This power must be exercised on reasonable grounds, not simply in good faith.59 If a meeting is adjourned for any reason, a fresh notice of the adjourned date does not have to be sent out to those members who did not attend the original meeting.60 Those attending the meeting should be told by the chairman of the adjourned date, if this can be agreed there and then.

51 Byng’s case, at 187; Mulholland v  St  Peter’s, Roydon, Parochial Church Council [1969] 1 WLR 1842, at 1848. 52 The duty to keep order was described by Megarry J as the first duty of a chairman in John v Rees [1970] Ch 345, at 382. The same case contains a detailed discussion of the chairman’s power of adjournment in the event of disorder and how it should be exercised (at 379 onwards). If a chairman validly adjourns a meeting and leaves the chair, no-one else can replace the chairman and continue with the meeting. 53 Re Indian Zoedone Co (1884) 26 Ch D 70, at 77. A point of order may only relate to an alleged breach of procedural rules or raise a matter of law. It may be raised at any time and the chairman will hear and rule on it immediately. 54 John v Rees [1970] Ch 345, at 378. 55 Ibid, at 377. 56 He should curtail long speeches and prevent second speeches if others want to speak. If the chairman is speaking, or he rises to speak, he will take precedence over other speakers. 57 See 6.29. 58 National Dwellings Society v Sykes [1894] 3 Ch 159, at 162. 59 Byng v London Life Association Ltd [1990] Ch 170, CA, at 189. 60 Scadding v Lorant (1851) 3 HL Cas 418, at 446.

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Amendments to motions 6.29 In company clubs the matter of adjournment is dealt with under section 332 of the Companies Act 2006. Both under the 1985 Table A Regulations61 and under the 2008 Model Articles,62 where a meeting is adjourned for more than 14 days, at least seven clear days’ notice shall be given to all members specifying the time and place of the adjourned meeting, together with notice of the general nature of the business to be transacted. We consider that this practice should be adopted by all clubs. No business should be transacted at the adjourned meeting which could not have been transacted at the original meeting. Both the CIC and the CIO have adopted rules which deal with the adjournment of general meetings.63

10.  Amendments to motions 6.29 Meetings consider motions. If the members at the meeting are ‘moved’ to vote in favour of a motion, the approved motion becomes a resolution whereby the members are ‘resolved’ to act in accordance with the motion. Experience shows that, unless properly handled, amendments to motions can cause havoc at a meeting. Sometimes the chairman is forewarned because the original motion and the proposed amendments are all set out in the agenda. The chairman does not have to take the amendments in the chronological order in which they were set down in the agenda; he should take them in the most logical order and he can prepare his thoughts on this before the meeting. Members, however, are entitled to propose amendments from the floor during the debate so long as they are within the scope of the motion of which notice was originally given.64 Any amendment should be precisely formulated and not a simple contradiction or disagreement with the original motion because that is done by voting against the motion. It is far better if any proposed amendment is reduced to writing but provided its effect is made reasonably clear it may be submitted orally to the meeting.65 If the proposed amendment is of an acceptable nature, it is customary for the chairman to ask for a seconder.66 If found, the proposer, but not the seconder, should be allowed to speak in support of the amendment. The amendment is then discussed and the chairman, not the proposer, should sum up the situation if necessary. The amendment is then put to the vote, and if successful the amended motion now becomes the motion before the meeting and can itself be the subject of amendment. If unsuccessful, the original motion continues to be discussed. In putting forward the proposed amendment to the meeting for the members to decide whether to accept or reject it, we consider that this item can be decided on a simple majority.67 If the proposed amendment is accepted, then any substantive

61 Regulation 45. 62 Article 41 (companies limited by shares) and article 27 (companies limited by guarantee). These articles contain detailed provision about adjournment. 63 CIC: article 37; CIO: clause 11(8). 64 Torbock v Lord Westbury [1902] 2 Ch 871, at 874. 65 Henderson v Bank of Australasia (1890) 45 Ch D 330, CA. 66 There is no legal requirement for a seconder (Horbury Bridge Coal Iron and Waggon  Co, Re (1879) 11  Ch  D  109, at 117) but the absence of a seconder goes to the chairman’s discretion whether to accept the amendment: Young v Sherman (2001) 40  ACSR  12 (NSW Supreme Ct). 67 Unless, which is unlikely, the rules stipulate to the contrary.

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6.30  Meetings of Club Members decision of the meeting thereafter must be on such majority as the rules require, for example, a two-thirds majority on a motion to amend the rules. 6.30 In a company club which has adopted the 2008 Model Articles, amendments to proposed resolutions are the subject of specific articles: article 47 for companies limited by shares and article 33 for companies limited by guarantee. Both these articles require the proposed amendment to be given to the company not less than 48 hours before the meeting. This timing is also the prescribed period under article 44 of a CIC. As to the model constitution of an Association CIO68, clause 10(2), which deals with the taking of a member’s decision by means of a resolution, contains no express power to amend this resolution, so that the general rule in 6.29 will apply.

11.  Members’ resolutions 6.31 A question sometimes arises how far a resolution passed by the members in general meeting is binding on the managing committee. Can the committee ignore the resolution? The answer depends on whether the resolution can be seen as an unwarranted derogation from the members’ delegation of their managerial powers to the Committee. If, as is the norm, under the rules they have delegated to the Committee the control and management of all the affairs of the club, the members in general meeting cannot then proceed to pass any resolution which fetters or interferes with the proper exercise of the Committee’s powers of management. Any such resolution can be treated by the Committee as a recommendation only, and it may give such weight to the recommendation as it thinks fit. Let us take the example of where the club has a club premises certificate, and the purchase and supply of alcohol is vested in the Committee under the rules.69 A resolution is passed by the members in general meeting to change the brewer who supplies the club. The Committee would be within its rights to treat the resolution as a recommendation only and reject it, even if it had been carried by an overwhelming majority of the members. This rejection may of course be based on some sound financial or contractual reason. If the members felt strongly enough about the rejection, however, their remedy would be either to requisition a special meeting to pass a vote of no confidence in the Committee70 or to vote the Committee out of office at the next AGM elections. This aspect has been developed most fully in the case of companies71 but it is submitted that its rationale, subject to the powers conferred on the management committee by the rules of the club, applies equally to unincorporated members’ clubs, working men’s clubs, and community clubs.

68 See Appendix J. 69 Licensing Act  2003, s  64(2). The members may themselves manage the purchase and supply of alcohol in general meeting instead of the Committee (ibid, s 64(2)), but except in a very small club this would not be a wise move. 70 See 5.30. 71 See Palmer’s Company Law (looseleaf) paras 8.2101–8.2102.

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Quorum 6.34

12. Quorum 6.32 A  quorum is the number of persons who must be present at a general or committee meeting to constitute a valid meeting. It is crucial for the proper running of a club that a rule (or bye-law) deals with this point. In relation to general meetings of an unincorporated members’ club and in the absence of such a rule, potentially all members would have to attend for a valid meeting to take place. In the Australian case of Ball v Pearsall72 Mr  Justice Young had this to say, after reviewing the English authorities: ‘Where the constitution of an unincorporated association makes no provision for a quorum for meetings of the association, in theory the business of that association can only be transacted when all the members are present; however, by consensual compact between the members some lesser number can be a quorum and in determining that lesser number, the activities of the members after the consensual compact was made are relevant.’ Evidence from the officers of a club that an unwritten rule as to quorum had been habitually used in the past could prove sufficient to justify a quorum less than the whole membership.73 6.33 It is good practice to avoid too small a number for a quorum for a general meeting of the members since this will prevent a clique from running the club. At common law the minimum number for a quorum is two.74 Thus in unincorporated members’ clubs the rules should specify an appropriate quorum. This is also an important point for company clubs to remember because under section  318 of the Companies Act 2006 two members of the company can constitute a quorum for general meetings. Similarly, for companies registered before 1 October 2009, regulation  40 of the 1985 Table A  Regulations laid down that two persons shall form a quorum at a general meeting. The answer for company clubs is to adopt a special article which lays down an appropriate quorum for its general meetings. The rules of a community interest company specify a quorum of two persons entitled to vote on the business to be transacted or 10% of the total membership (represented in person or by proxy), whichever is the greater.75 The rules of the Association CIO specify a quorum of three members or 5% of the members (whichever is the greater).76 6.34 One needs to draw a distinction between a quorum required to requisition a general meeting and, once convened, the quorum required for a valid meeting to take place. The two quorums do not have to be the same number. If a club held a registration certificate under the Licensing Act 1964, the quorum required for a valid requisition of a general meeting was not to exceed 30 or to be more than one-fifth of the total number of members entitled to attend meetings and

72 (1987) 10 NSWLR 700, at 703. 73 John v Rees [1970] Ch 345, at 388. 74 R v Secretary of State for the Environment, ex p Hillingdon [1986] 1 WLR 192; and Sharp v Dawes (1876) 2 QBD 26 at 29. 75 CIC: article 34.2. 76 CIO: clause 11(5)(b).

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6.35  Meetings of Club Members vote there at (whichever was the less)77 and this is regarded as a good working rule for all clubs.78 If a club has 300 members, one-fifth is 60, but the requisition would only require 30 signatures. However, it is perfectly in order for the rules to stipulate that the quorum for the meeting itself shall be a higher number, say 40 or 50. A question which also arises is whether a meeting has to be quorate at all times or only at the beginning of the meeting. Suppose several members left during the course of a meeting, and their leaving made the quorum insufficient. Could the meeting validly continue? The answer is in the negative because what is required is that the meeting must be quorate both at the beginning of the meeting when the chairman declares the meeting open, and when any decision is made during the meeting.79 However, a member who left the meeting deliberately so as to remove the quorum cannot rely on the lack of quorum in challenging decisions made after his departure.80 An apparent exception too is the case of Re Hartley Baird Ltd,81 which concerned a company meeting. Mr Justice Wynn-Parry held that since the articles expressly stipulated for a quorum to be present at the beginning of the meeting, there was no requirement for a continuing quorum throughout the meeting. 6.35 Period of grace In an unincorporated members’ club, if there is no quorum at the scheduled start of a meeting in unincorporated members’ clubs, it is customary to allow a short period of grace, say half an hour, to see if the required quorum can be established by latecomers. This is sometimes expressed in the rules or bye-laws but even if they are silent it is considered that it would be in the chairman’s power to adjourn the start of the meeting for a short while for the benefit of those members who are present and who may have travelled a considerable distance to attend the meeting or have given up their leisure time to do so.82 In a company club, regulation 41 of the 1985 Table A Regulations and thereafter article  41(1) (for companies limited by shares) and article  27(1) (for companies limited by guarantee) of the 2008 Model Articles all permit a period of grace of up to half an hour if no quorum is present at the appointed time, after which time the meeting is automatically adjourned. In a community interest company, article 34.3 deals with the situation. If a quorum is not present within half an hour of the time appointed for the meeting, it shall stand adjourned to the same day in the next week at the same time or place, or to such time and place as the directors may determine. In the Association CIO, clause 11(5) deals with the situation. If the quorum is not present within 15 minutes of the starting time and the meeting was called by the members, the meeting is closed. If, however, the meeting was called in any other way the chair must adjourn the meeting and he will announce the date, time and place of the resumed meeting, alternatively the resumed date will be notified to the

77 Licensing Act 1964, Sch 7, para 2(3). 78 Even though this rule has not been carried through to the Licensing Act 2003. 79 Henderson v James Louttit and  Co  Ltd (1894) 21  R  674, Ct of Sess, at 676. Regulation 40 of the 1985 Table A Regulations, and article 38 (for companies limited by shares) and article 24 (for companies limited by guarantee) of the 2008 Model Articles are to like effect. 80 Ball v Pearsall (1987) 10 NSWLR 700, at 705. 81 [1955] Ch 143. 82 See John v Rees [1970] Ch 345, at 383.

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Voting 6.39 members at least seven clear days before resumption. Clause 11(5)(e) goes on to say that if at the adjourned meeting the quorum is not present within 15 minutes of the start time of the meeting, ‘the member or members present will constitute a meeting’. We add that any meeting must have two or more persons to constitute a valid meeting so that a single member cannot at law constitute a meeting.

13. Voting 6.36

There are four methods of voting which are used in club meetings:83

(1)

by acclamation;

(2)

by a show of hands;

(3) by poll; (4)

by ballot.

6.37 Acclamation Sometimes it is not necessary to put a motion to a formal vote since the chairman of the meeting will have sensed that the mood of the meeting does not require this step.84 6.38 Show of hands This is almost invariably the first method of voting at a meeting. If the meeting is large it is sensible to appoint scrutineers to help count the votes. The chairman can order a recount if necessary.85 The chairman is entitled to vote along with the other members.86 In company clubs the voting must be decided on a show of hands under regulation 46 of the 1985 Table A Regulations or under article 42 (for companies limited by shares) or article 28 (for companies limited by guarantee) of the 2008 Model Articles, unless a poll is duly demanded in accordance with the articles. CICs and Association CIOs have similar rules.87 6.39 Poll A chairman may proceed to voting by poll without there first being a show of hands,88 unless the rules stipulate that the first method of voting shall be by some other method of voting such as show of hands. A poll openly records the number of votes, either by an individual voting slip or by signing a voting list, and is a more accurate way of establishing the true vote. A member who is dissatisfied with the vote by show of hands can demand a poll as of right, unless there is a rule to the contrary.89 Rules often regulate this particular right.90

83 A fifth way is voting by division (a method long used by Parliament but seldom if ever used by clubs). 84 Re The Citizens Theatre Ltd 1946 SC 14, at 18. This voting is sometimes recorded in the minutes as ‘Nem. Con.’ This is shorthand for ‘Nemine contradicente’, ie  with no one opposing. This is not the same thing as a unanimous decision in favour. 85 Hickman v Kent or Romney Marsh Sheepbreeders’ Association (1920) 36 TLR 528, at 533. 86 Nell v Longbottom [1894] 1 QB 767, at 771. 87 CIC: articles 38.1 and 39.1; CIO: clause 11(6)(b). 88 R v Rector of Birmingham (1837) 7 A & E 254. 89 R v Wimbledon Local Board (1882) 8 QBD 459, CA. 90 Company club: see the articles cited in 6.40; CIC: article 40; CIO: clauses 11(6)(b) and 11(6)(c).

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6.40  Meetings of Club Members Once a valid request for a poll has been made, the result of any vote by a show of hands ceases to have effect.91 A poll has to be taken of all the members entitled to vote.92 This raises the question whether the poll is restricted to those attending the meeting or whether it means all the members of the club, which would normally necessitate the adjournment of the meeting. The answer is that the decision should be left to those attending the meeting. In R v Rector of St Mary, Lambeth93 all the ratepayers of a large parish were entitled to vote in the election of the churchwardens and a meeting was duly convened. The election was conducted on a show of hands, and after the result several ratepayers demanded a poll of the whole parish, but the majority of the ratepayers at the meeting decided that it should be restricted to those present. That decision was upheld by the Court of Exchequer Chamber on the ground that there was no evidence that anyone who would have voted was excluded from the meeting. In argument an extract from Prideaux’ Directions to Churchwardens (10th edn, 1835),94 was quoted. It neatly summarises why absent members cannot complain if they do not attend meetings: ‘If persons properly qualified are duly assembled at the time and place appointed, the present include the absent, and the major part of the present include all the rest. For those who absent themselves after notice given, do it voluntarily, and therefore devolve their vote upon those who are present’. 6.40 In company clubs under regulation 46 of the 1985 Table A Regulations and under the 2008 Model Articles a poll may be demanded at the meeting before or on the declaration of the vote by a show of hands.95 In addition, under article 44(1) (a) (for companies limited by shares) or article 30(1)(a) (for companies limited by guarantee) of the 2008 Model Articles a poll may now be demanded in advance of the general meeting where the resolution is to be put to the vote. In this way the mandatory show-of-hands rule is not abolished but can be overridden. The 2008 Model Articles stipulate that any poll must be taken immediately so that, unlike at common law, there will be no question of adjourning the meeting, and this is a sensible stipulation. If the poll is used in conjunction with proxy voting, it should ensure a much greater involvement by all the members when it comes to making important decisions on special business, and is recommended for all categories of club, but is especially appropriate where the club has a large membership spread over a wide area which militates against personal attendance at meetings. A pollcum-proxy procedure will, however, entail the rules being appropriately worded or amended in order to authorise it. A CIC and an Association CIO have rules relating to polls.96 6.41 Ballot It is common for officers of a club to be elected by secret ballot at the AGM, if the office is contested. The secretary should prepare the ballot papers before the meeting with the names of the candidates arranged in alphabetical order. It is common for the candidates to prepare a short manifesto (say 150 words) which is circulated prior to the election meeting or for the chairman at the meeting

91 92 93 94

R v Cooper (1869–70) LR 5 QB 457. R v Rector of St Mary, Lambeth (1838) 8 A & E 356. (1838) 8 A & E 356. The office of churchwarden had been, since the Reformation days, one of honour and responsibility, hence the numerous editions of Mr Prideaux’ book. 95 2008 Model Articles, article 44(1)(b) (shares) or article 30(1)(b) (guarantee). 96 CIC: article 40; CIO: clause 11(6)(d).

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Voting 6.44 to let each candidate introduce himself and say a few words in support of his candidature. The vote is taken by each member marking with a cross his choice of candidate. The vote is then counted by the secretary or by the scrutineers if appointed. 6.42 Proxies Where a member appoints another person to exercise all or any of his rights to attend, speak and vote at a general meeting, that person will act as the member’s proxy. There is at common law no right to appoint proxies97 and so there must be an express rule permitting this mode of voting. However, in the case of a company club, a CIC and an Association CIO, each of them has a built-in proxy rule.98 On a show of hands, each member has one vote only even though they may be acting as proxy for several members.99 This is because it is a counting of hands; nothing more. If a voter is unhappy with the outcome, he or she can demand a poll as of right and then all the proxy votes are taken into account.100 The use of proxies under a poll is now commonplace. If the rules contain a right to demand a poll in advance of or at the general meeting, the club secretary will send out the proxy form with the notice of the meeting, to be returned via e-mail or post by a specified date before the meeting. A form of proxy is set out in Appendix M. 6.43 Equal voting rights The Equality Act  2010 has restored the position with regard to equal voting rights at general meetings which was set out (with limited exceptions) in paragraph  2(4) of Schedule  7 to the Licensing Act  1964. This paragraph was repealed by the Licensing Act 2003. Also, clubs must not now discriminate against members when it comes to voting at general meetings so that, for example, the Basset Golf Club could not give greater voting rights to its male members than to its female members since this would amount to sex discrimination.101 6.44 Voting majority This is another area where the rules need to make clear what majority is required for any resolution of the members to be binding on the membership as a whole. It has long been established that where the duties which are imposed on a corporation are of a public nature, the will of the corporation may be expressed by a simple majority of the members, so that the act of the majority becomes the act of the corporation.102 But in private bodies this rule does not apply uniformly across the board where a unanimous decision of the body is required.103 In Abbatt v Treasury Solicitor104 Lord Denning MR expressed the view that, absent an express rule in an unincorporated members’ club, the members had an implied power to amend their rules by a simple majority, and by implication to make any other decision by this majority. Doubt has already been

97 Harben v Phillips (1883) 23  Ch  D  14, at 35–36 (Bowen LJ); Woodford v Smith [1970] 1 WLR 806, at 810. 98 Company club: see 6.57; CIC: articles  42 and 43; CIO: clause 11(6)(b) and its Appendix under the heading ‘Proxy voting’. 99 Ernest v Loma Gold Mines Ltd [1896] 2 Ch 572, at 579 (Chitty J). 100 Ibid, at 579–580. 101 See 4.20–4.22. 102 Attorney General v Davy (1741) 2 Atk 212; Grindley v Barker (1798) 1 Bos & P 229, at 236. 103 Harington v Sendall [1903] 1 Ch 921 (unincorporated members’ club); Perrott & Perrott Ltd v Stephenson [1934] Ch 171 (company). 104 [1969] 1 WLR 1575, at 1583.

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6.45  Meetings of Club Members expressed as to the existence of this implied power of amendment105 but this does not mean that the Master of the Rolls was wrong on the simple majority point, which has much to commend it for run-of-the-mill decisions.106 A different voting majority may, however, be required for different classes of resolution. As a general rule a two-thirds voting majority for the more important resolutions has practical advantages over a three-quarters majority. It is normal practice for Committees to adopt a simple majority when arriving at their decisions, save that in the case of an amendment of the bye-laws (if this is within the remit of the committee) it is advisable for the rules to stipulate a two-thirds majority. 6.45 In a company club (which would include a CIC) an ordinary resolution at a general meeting of the company may be passed by a simple majority.107 A special resolution at a general meeting requires a majority of not less than 75%.108 The articles of association may prescribe what business of the company requires a special resolution, but a special resolution may also be required by law, for example, changing the name of the company109 or amending its articles.110 Similarly, the ordinary decisions in general meetings of an Association CIO may be passed by a simple majority of votes.111 6.46 In Knowles v Zoological Society of London112 the society had over 7,000 fellows (members). In 1958 at a general meeting to confirm the adoption of new bye-laws, 1,788 fellows voted in favour whilst 1,227 voted against, 18 abstained and one vote was disallowed. The motion was passed by a simple majority at the meeting. The rules required confirmation by ‘a majority of fellows entitled to vote’. Did this mean all the fellows of the society or only those present at the meeting? The Court of Appeal held the latter, but it is wiser if the rule states, ‘a majority of members present at the meeting and entitled to vote’. The case also draws attention to the need, on this form of wording, to count abstentions and wasted votes. Although members commonly think that by abstaining or wasting their vote they are remaining neutral, they are in fact assisting the opposition to the motion because their presence at the meeting will be taken into account in calculating the required majority. Similarly, abstainers would count towards the majority if the rule simply stated, ‘a majority of the members present at the meeting’.113 It would only be otherwise if the rule stated, ‘a majority of those members present and voting at the meeting’. In this last event the number of abstainers would not be included in the calculation of the majority. Which form of wording should be used is a matter of preference for the individual club, but in view of the frequent confusion over the role of abstainers, some clubs may prefer to adopt this last-mentioned solution. 6.47 Casting vote A casting vote prevents stalemate. Since the repeal of the Licensing Act 1964 it has once again become lawful to give the chairman of the 105 See 2.23. 106 Warburton on Unincorporated Associations (2nd edn, 1992) at p 28 supports the view that if the rules are silent as to the majority required to pass a resolution, a simple majority will be sufficient. 107 Companies Act 2006, s 282(1). 108 Ibid, s 283(1). 109 Ibid, s 77(1)(a). 110 Ibid, s 21(1). 111 CIO: clauses 10(2) and 11(6)(a). 112 [1959] 1 WLR 823, CA. 113 See, for example, s 4(2) of the Credit Unions Act 1979 where this form of words is stipulated.

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Minutes 6.49 meeting a casting vote in addition to his ordinary vote at general meetings of the members, and it is customary to do so. The chairman, however, must use his original vote before exercising his casting vote.114 In a company club, regulation 50 of the 1985 Table Regulations115 and article 13(1) of the Model Articles 2008116 give a casting vote to the chairman of the meeting, if the number of votes for and against a proposal is equal. Both the CIC and Association CIO have rules which give a casting vote to the chairman in relation to a show-of-hands and polls.117 6.48 Next comes the question as to the manner in which this casting vote is cast. It is said that as a normal practice the casting vote should be used to maintain the status quo, so that in the event of a tied vote the chairman who say voted for the motion should now use his casting vote to reject the motion.118 This stance follows the parliamentary practice, known as Speaker Denison’s Rule.119 The Speaker held that in the House of Commons the chairman on a tied vote should use his casting vote in favour of the status quo on the ground that you need a majority to vote in favour of a change. This is plainly the guiding principle if the voting body has a neutral chairman (as is the case in the House of Commons). But we take the view that in normal circumstances the chairman of a club meeting, whilst acting neutrally (ie fairly) in all procedural matters, does not carry the status of neutrality in dealing with matters of substance affecting the club. He will be a member of the club actively involved in the conduct of its affairs, unlike the Speaker of the House of Commons who takes no active part in its political affairs. Accordingly, in club law we do not accept Speaker Denison’s Rule because it unfairly fetters the scope of the chairman’s decision-making when exercising his casting vote; he should instead be using his casting vote to the best of his ability.

14. Minutes 6.49 Minute-taking is described as a crucial, yet often under-valued, task.120 The concept behind the recording of minutes of a general meeting is that the club has a ‘fair and accurate’ record of what has been decided or resolved. It thus saves argument at a later stage when recollection of the particular meeting has faded from the memory. The minutes should be as concise as the circumstances require. It is unusual for the minutes of general meetings to record speeches or arguments at the meeting.121 The minutes should record the essential elements of the discussion and the full text of any resolution which was passed. They should avoid comment and expressions of opinion. It is seldom helpful to record the proceedings in descriptive terms, such as ‘Mr Brewer with some heat denounced

114 This vote is called the second or casting vote. 115 Before it ceased to have effect on 1 October 2007 under The Companies (Tables A to F) (Amendment) (No 2) Regulations 2007 SI 2007/2826, article 3. 116 The same numbered article applies to both companies limited by shares and limited by guarantee. 117 CIC: article 39.3; CIO: clause 11(6)(e), if adopted. 118 See Smith & Littlewood, Club Law and Management: Questions and Answers (2017) p 72. 119 John Evelyn Denison was the Speaker of the House of Commons from 1857 to 1872. 120 A comment of the Institute of Chartered Secretaries and Administrators (ICSA): Minuting meetings, made on 27 September 2016. 121 A separate document is sometimes created which records the meeting in more detail.

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6.50  Meetings of Club Members the motion as a trick contrived for the purpose of expelling Mr Pearce’, even if that is what he had said and the manner in which he had said it. No doubt Mr Brewer’s opposition to the motion would mean his voting against it, which will be recorded, and this will be a sufficient recognition of his disapproval of the motion. The situation with regard to committee meetings is somewhat different. In compiling the minutes of committee meetings a good test to adopt is to ask whether an absent member reading the minutes would fully understand what had been decided at the meeting.122 Some Committees maintain an action list so that the progress of any matter can be monitored over a period of time. Another way of keeping track of a particular topic is to delegate it to an individual number to be carried forward from meeting to meeting. In company clubs (which would include a CIC) the company must keep for at least 10 years the minutes of all proceedings of general meetings.123 These minutes must be open to the inspection of any member without charge.124 6.50 There are various methods of recording minutes but as a basic pattern they might be as follows: Method 1 Mr  Stewer attended before the committee re the charge of misconduct, namely, his rudeness to the President at the New Year’s party. Resolved: that Mr Stewer be suspended from membership for three months. Voting for 9, against 3, abstention 1. This method simply records, in the order in which they came before the meeting, each matter discussed and the eventual result. Another method is to record in addition all amendments, the names of movers and seconders, the fate of the various proposals and the ultimate result. Method 2 Mr  Stewer attended before the committee re the charge of misconduct, namely his rudeness to the President at the New Year’s party. Mr Stewer admitted the facts and apologised for his conduct. He then retired from the committee room. Mr  Gurney moved (Mr  Davey seconded) that he be reprimanded by the chairman of the club. Mr  Whiddon moved (Mr  Hawke seconded) as an amendment that he be expelled from the club. Voting for the amendment: for 5, against 8. Mr Cobley then moved a further amendment (Mr Brewer seconded) that Mr Stewer be suspended for three months. This amendment

122 A specimen set of committee minutes may be found at Appendix N. For helpful guidance see ICSA’s The Practice of Minuting Meetings (2 September 2016). 123 Companies Act 2006, s 355(1)(2). 124 Ibid, s 358(3).

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Minutes 6.54 was carried and, on being put as the substantive motion, was carried by 9 votes in favour to 3 votes against, with one abstention. Resolved: that Mr Stewer be suspended from membership for three months. 6.51 A problem can sometimes arise in meetings when a member insists that his viewpoint is recorded in the minutes, for example, he wants the reasons for his dissent recorded.125 Is the secretary obliged to comply? The law is not clear on the secretary’s duty in this regard but we do not think his duty goes that far. If the secretary (or minute-taker) has doubts about the propriety of recording any matter he should ask the chairman for a ruling. 6.52 Signing minutes The chairman of the meeting should sign the minutes of the previous meeting once the members who attended the meeting have approved their accuracy.126 Once signed, the minutes must not be altered or corrected internally.127 If the minutes need correction, the solution is to add an additional minute correcting the mistake and for the chairman to sign that addition, which will usually occur at the next meeting. 6.53 Distribution Minutes of general meetings should be supplied to the whole membership, whereas minutes of committee meetings are generally considered confidential to the committee members. In a company the directors’ minute book is confidential to the directors because it contains the record of the private affairs of the company, a separate legal entity,128 and by analogy this seems to apply to the committee’s minute book, whether the club is incorporated or unincorporated. But the analogy cannot be pressed too far because in a members’ club the Committee is acting on behalf of the members collectively and the question might be asked why the members are disentitled from inspecting the minute book of its own Committee. We submit that these minutes are prima facie confidential to the Committee and should not be disclosed to any member except for good reason.129 If it were otherwise the Committee might be inhibited from doing its job properly in fear, for example, of a defamation claim. It is true that clubs do sometimes allow their members at or shortly before the AGM personally to inspect the Committee’s minute book for the preceding year (without allowing any copy to be taken thereof). This is a far cry from posting the minutes on the club’s website or circulating them generally among the membership. The restricted disclosure at the AGM can at least be said to be supportive of confidentiality, whereas the other procedures destroy it and should not be countenanced. 6.54 Defamation We draw attention to the fact that meetings can sometimes generate allegations of defamation.130 For there to be any liability in libel the statement containing the defamatory words must be published in writing to a third party. In the context of meetings this could arise in the circulation of minutes, or say in documents or e-mails circulated before, during and after the meeting. Club members should not be unduly worried on this score. In the ordinary course of events the member will be protected by the defence of ‘privilege’. In law this 125 See the hypothetical example given in 5.61. 126 If kept electronically, the minutes should be authenticated in some other manner. 127 Re Cawley & Co (1889) 42 Ch D 209, CA, at 226. 128 Gore-Browne on Companies (looseleaf), 11[24]. 129 See 5.87 for an example of disclosure pursuant to the Data Protection Act 2018. 130 For the topic of defamation see 13.59.

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6.55  Meetings of Club Members means a person is able to speak or write freely. The privilege, however, might be ‘qualified’, that is to say, the defence will be defeated if the claimant can show that the statement was published ‘maliciously’. Malice here means that the publisher knew that the statement was false or he acted in a reckless disregard for the truth. In short, there is no liability, however negligent or inaccurate the statement, provided it was made honestly.131

15.  Committee meetings 6.55 As mentioned in 5.25, the managing committee is the master of its own procedures. Normally there is a quorum rule but in its absence the quorum for a Committee will be the entire Committee; this is because the delegation of powers is not to the individual members of the Committee but to the Committee as a whole.132 Such a quorum would be entirely impracticable. In these circumstances it would be for the Committee to decide its own quorum for its meetings. We add that committee meetings are always attended by the members personally, so there is no question of proxy voting. The chairman of the club should chair meetings of the Committee by virtue of his office. There should be provision for an alternative chairman if the designated chairman is absent.133 If the rules are silent on the question of who should take the chair, it is up to the members present at the committee meeting themselves to choose their own chairman.134 Otherwise the general rules of procedure for general meetings apply equally to committee meetings, save proxies are not a relevant element of committee meetings because its members are specifically elected or appointed thereto and it would not be appropriate to permit proxy voting. There is, however, greater informality in conducting committee meetings, for example, the date of the next committee meeting is commonly decided there and then at the end of a committee meeting; this new date must, of course, be circulated to those committee members who did not attend the original meeting. We would add that if through indolence or neglect or for any other reason, no committee meeting is convened when plainly it should have been, we consider that any member of the committee would probably have an inherent right to convene a committee meeting on reasonable notice; otherwise the management and control of the club’s affairs would become rudderless, to the obvious detriment of the club. Further, insofar as the meetings of the Committee play an important role in club affairs, the rules can authorise the termination of a member’s standing thereon due to his substantial failure to attend such meetings. This power of termination should also be one of the Committee’s powers in relation to the members of any sub-committee which it sets up.

131 See 13.60. 132 Brown v Andrew (1849) 18 LJ QB 153; R v Liverpool City Council ex p Professional Association of Teachers (1984) Times, 22 March. 133 This is commonly done by making provision for a vice-chairman. 134 This would also apply to sub-committees where, more often than not, the chairman of the club would not be part of its composition.

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Statutory requirements for company clubs 6.57 6.56 The procedure as to meetings for sub-committees is in the hands of the Committee (see 5.24) and, generally speaking, what is said about committees in 6.55 is applicable to sub-committees. It is the Committee’s obligation, however, to prescribe the rules (often via bye-laws) which regulate the meetings of the club’s sub-committees.

16.  Statutory requirements for company clubs 6.57 These clubs must comply with the provisions of the Companies Acts. For companies formed before 1  October 2009 the procedure of their meetings will be set out in their articles, that is to say, they are usually governed by the special provisions in the 1985 Table A Regulations which are directed to the convening and holding of meetings (this includes notice, quorum, and voting etc). For companies formed on or after 1 October 2009 the Companies Act 2006 has adopted a different approach; the provisions concerning resolutions and meetings are to be found in the Act itself. The reader is directed to the Companies Act 2006135 and then to Part 13 of this Act (as amended). In a nutshell, the relevant provisions are as follows: Chapter 1: Resolutions generally which include: (a) general rule (section 281); (b) ordinary resolutions (section 282); (c) special resolutions (section 283); (d) votes: general rules (section 284); (e) voting by proxy (section 285); (f) voting rights on poll or written resolution (section 285A); Chapter 2: Written resolutions (sections 288–300: see 6.58); Chapter 3: Resolutions at meetings which include: (a) calling of meetings (sections 302–306); (b) notice of meetings (sections 307–313); (c) members’ statements (sections 314–317); (d) procedure (sections 318–323); (e) proxies (sections 324–331); (f) adjournment (section 332); (g) electronic communication (sections 333–333A); Chapter 6: Records of resolutions and meetings (sections 355–359); Chapter 7: Supplementary provisions which include: (a) compilation of periods of notice (section 360); (b) electronic meetings and voting (section 360A: see 6.59).

135 See the Government website, legislation.gov.uk.

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6.58  Meetings of Club Members 6.58 Written resolutions136 These resolutions are governed by sections 288– 300 of the Companies Act 2006. The procedure only applies to private companies,137 but cannot be excluded by the company’s articles.138 Their importance lies in the fact that the procedure does away with face-to-face meetings but they may not be used to remove a director or auditor.139 Directors140 and members141 may propose written resolutions. Resolutions may be passed by the same majority as for resolutions at meetings.142 ‘Written’ does not necessarily mean in writing on hard copy; a written resolution may be proposed by e-mail or on the company’s website.143 Once the member has signified his agreement to the resolution he cannot revoke it.144 The resolution must be passed within 28 days of the date of circulation; after this period it automatically lapses.145 6.59

Electronic meetings Section 360A of Chapter 7 of Part 13 reads as follows:

‘(1) Nothing in this Part is to be taken to preclude the holding and conducting of a meeting in such a way that persons who are not present together at the same place may by electronic means attend and speak and vote at it. (2) In the case of a traded company the use of electronic means for the purpose of enabling members to participate in a general meeting may be made subject only to such requirements and restrictions as are: (a)

necessary to ensure the identification of those taking part and the security of the electronic communication, and

(b)

proportionate to the achievement of those objectives.

(3) Nothing in subsection (2) affects any power of a company to require reasonable evidence of the entitlement of any person who is not a member to participate in the meeting.’ The above wording can be suitably modified for club rules.146

17.  Proprietary clubs 6.60 General meetings of the members in a proprietary club are just as much an essential element as they are in a members’ club. If, therefore, there was no provision for meetings (either for general or special business) in the club rules, it is doubtful whether the club would constitute a club at law, since the sixth criterion (the need for collegiality) referred to in 1.1 would not be fulfilled. 136 The constitution of a CIO also has a rule which deals with written resolutions without a general meeting: see clause 10(3). 137 Companies Act 2006, s 288(1). 138 Ibid, s 300. 139 Ibid, s 288(2). 140 Ibid, s 288(3)(a). 141 Ibid, s 288(3)(b). 142 Ibid, s 288(5). For voting majority see 6.44. Under the Companies Act 1985 (as amended) the unanimous vote of all the members was required to pass a written resolution. 143 Ibid, ss 298 and 299. 144 Ibid, s 296(3). 145 Ibid, s 297(1)(b). The articles may specify a different period: ibid, s 297(1)(a). 146 See Rule 31 of the model full set of rules (Appendix K); and Rule 16 of the model short-form rules (Appendix L).

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Chapter 7

Cessation and Curtailment of Club Membership

1. Introduction 7.1 This is a topic which has relevance to all clubs of whatever description. It is also an important topic for those members who find themselves at the wrong end of expulsion or suspension proceedings. If the Committee of a members’ club does not get the procedure right or makes a mess of the substantive hearing of the proceedings, the club will face the prospect of litigation being brought against it by the aggrieved party, with its attendant unpleasantness and with the risk of costs being awarded against the club. In proprietary clubs the practice varies; sometimes it is the proprietor who exercises the powers of expulsion and suspension and at other times the proprietor delegates these powers to the Committee of the club.

2. Resignation 7.2 Express resignation It will be recalled from 1.1 that the first criterion of a club is the voluntary nature of the association of the members who comprise the club. From this criterion follows the proposition that a member may at any time voluntarily retire from a club by his resignation or withdrawal from it. In Finch v Oake1 Lord Justice Lindley, at 415, put the position as follows: ‘What then is the position of a member who has paid his subscription of 10s 6d2 for the current year? Can he withdraw from the association at any moment at his own pleasure, or can he withdraw only with the consent of his fellow members? In my opinion, when he has paid his subscription for the year he is under no obligation whatever to his fellow members. By paying his subscription he no doubt acquires certain rights and benefits. But what is there to prevent him from retiring from the association at any moment he wishes to do so? Absolutely nothing. In my opinion no acceptance of his resignation is required, though of course he cannot get back the 10s 6d which he has paid. The other members have no power to say that he shall not retire, and there is no law that a resignation which cannot be refused must be accepted before it can take effect. If therefore a member of this association chooses, even from mere caprice, to retire from it, he can do so at any time without

1 2

[1896] 1 Ch 409. This was half a guinea in imperial coinage and is 52.5 pence in decimal coinage.

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7.3  Cessation and Curtailment of Club Membership the consent of the other members, and in order to become a member he must be re-elected.’3 7.3

This judicial statement needs some clarification:

(1) the right to resign is inherent and is not dependent on a club rule giving permission to resign. On the other hand, we see no reason why this right should not be regulated in the rules, for example, by stipulating that the resignation should be in writing or that it should be on 14 days’ notice. For practical reasons a written notice of resignation creates finality and provides evidence to the potential benefit of both parties but the rules should not go so far as to forbid an oral resignation; (2) no particular form of words is required to constitute a valid resignation. In the case of In re Sick and Funeral Society of St John’s Sunday School, Golcar4 Mr Justice Megarry commented: ‘There can be no magic in the word “resign”, nor in whether the resignation is written or oral. The essence of the matter seems to me to be whether the member has sufficiently manifested his decision to be a member no more. I cannot see why such a manifestation should not be by conduct instead of by words: the only question is whether the member’s decision has been adequately conveyed to the society by words or deeds’; (3)

the need for re-election is important and was re-affirmed in the Golcar case, at 63. Could the Committee waive the resignation as an act of management? We doubt so, since the club will now be dealing with a non-member, and the members might take objection that the re-election had occurred without the proper formalities being observed, such as the need for a proposer and seconder. It would be different if an express rule governed the position;5

(4) Lord  Justice Lindley was being too dogmatic in saying that a member of a club owed ‘no obligation whatever’ to his fellow members. We consider that club members owe to one another various obligations or duties under the contract of membership. Some obligations such as the payment of subscriptions are express; others such as the requirement to behave properly in the clubhouse are implied. The question arises whether the exercise of the undoubted right to resign could result in the member being in breach of his contract of membership. Suppose the Upper Basset Cricket Club had an outstanding opening batsman who had paid his annual subscription on 1 January. Could he without warning resign on 1 May and immediately join and play for the Lower Basset Cricket Club, their arch rivals? The answer is in the affirmative as a matter of contract law because a person makes no promise, express or implied, that he will continue as a member for the period of his paid-up subscription. The position may be different in practice because of the rules issued by the game’s governing body or by the league in which the clubs are playing since such rules might prohibit the switching of clubs in this fashion.

3 4 5

See also In re St James Club (1852) 2 De G M & G 383, at 390. [1973] 1 Ch 51, at 63. Lambert v Addison (1882) 46 LT 20 (where the court upheld a bye-law, which permitted former members of the club to be re-admitted on paying arrears of subscription but without the formalities of an election and without paying the entrance fee).

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Resignation 7.5 7.4 Tacit resignation In the case of In re Sick and Funeral Society of St John’s Sunday School, Golcar6 the society became dissolved with surplus funds in hand and the question arose to whom these funds should be distributed. The members were required to make weekly or quarterly payments by way of subscription to the sickness and funeral expenses fund. Certain members who had failed to make any payment for over three years now tried to pay their arrears of subscription in order to partake as members in the distribution. The question arose whether their failure had amounted to resignation, and Mr Justice Megarry held that it did so. The judge, at 62, had this to say on the topic: ‘No reasonable man is likely to feel any real doubt about the intentions of a member of a society who for over three years has failed to make his weekly or quarterly payments, and has put forward not a word to suggest that this was due to some mistake, or that he did some acts which showed an intention to continue as a member. As I  have indicated, among the many thousands of clubs and societies in the country there must be many cases of members whose membership has never been terminated in accordance with any provision in the rules, and yet who are regarded as still being members neither by themselves nor by the club or society. If their membership is said to have “lapsed”, that may be another way of describing a tacit resignation. However it is described, it seems right that there should be such a doctrine, so that neither the member nor the club or society should be able to claim against the other on the basis that what has long been dead de facto still lives de jure. A moribund membership ought not to be capable of resurrection.’ However, mere inactivity will not necessarily, without more, constitute tacit resignation in the absence of other surrounding circumstances indicating an intention to resign. In Conejera v Webb7 inactivity which was explained by absence abroad and disenchantment with those who had taken over the association did not manifest the necessary intention. 7.5 Requested resignation What is the legal effect of a request by the Committee to the member that he resign his membership? Can the refusal to comply with this request justify the termination of membership? In Gaiman v National Association for Mental Health8 the defendant association, which was a company limited by guarantee, had an article of association which read: ‘Article  7  A  member shall forthwith cease to be a member … (B) if he is requested by resolution of the council9 to resign.’ There had been a recent influx of new members, all of whom were Scientologists and who fundamentally disagreed with the way the association was run. Under article 7 the association duly requested the resignation of 302 of these members. Mr  Justice Megarry held that, whilst the word ‘resign’ was somewhat of a euphemism, what terminated the membership was not the resignation but the request to resign. In other words, it was a forced resignation. The judge upheld the association’s request as effectively terminating their membership. This had been done in accordance with the association’s rules, which gave a right of appeal (which 6 7 8 9

[1973] 1 Ch 51. [2002] EWHC 1644 (Ch). [1971] Ch 317. The governing body of the association.

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7.6  Cessation and Curtailment of Club Membership had been exercised), and in the honest belief that it was in the best interests of the association, but it was also done in contravention of the rules of natural justice. This case should be treated with considerable caution because the judge, at 335, specifically relied on the ‘generous set of statutory rules governing companies and the rights of members’ as enabling him to disapply the rules of natural justice in the field of company law with regard to that particular case.10 In the ordinary course of events we consider that a forced resignation is tantamount to expulsion and no unincorporated members’ club will succeed in upholding in court an expulsion dressed up as a resignation where there has been a disregard of the rules of natural justice. 7.6 Enforced resignation Has a club under its rules the discretionary right to refuse to accept a renewal of subscription or to return a subscription if paid, thus removing a person from membership? In Royal Society for the Prevention of Cruelty to Animals v Attorney-General11 the issue before the court was whether the Society could control the influx of pro-hunting members by invoking its Rule III.7 which conferred absolute discretion on the Society to ban membership. Mr Justice Lightman held that such a rule was not conducive to the good name of the Society (which was a charity) whereby it adopted such an arbitrary and unattractive method of implementing its membership policy, so that it should amend its Rule III.7 to meet the injustice of its admission procedure. In other words, the simple refusal to accept the renewal of a subscription was tantamount to an enforced resignation and unlawful. 7.7 Invitation to resign All this is not to say that an invitation to a member to resign his membership has no place in the options available to a managing committee in the event of genuinely unacceptable behaviour on the part of the member. A  voluntary resignation has long been used as a beneficial face-saving device which has resolved many an awkward situation in a club.

3.  Lapsed membership 7.8 In a members’ club there is no implied term of the contract of membership that if a member fails to pay his subscription by the specified date, or within a reasonable time of it becoming due, his membership will lapse.12 The club’s primary remedy is to sue the member for the arrears of subscription. If the arrears are of long standing, say of at least one year or more, the club can argue that the member has repudiated his obligations under the contract of membership and it can then accept the repudiation which will discharge the contract.13 This will have the effect of cancelling the membership but leaving the club with the onus of suing for the arrears of subscription. A neater solution is to have an express rule which states that in the event of a failure to pay the subscription within a specified period after it has become due, the membership shall automatically lapse.14 The rule can be made 10 The courts will normally apply the rules of natural justice in company law cases; see for example Byrne v Kinematograph Society Renters Ltd [1958] 1 WLR 762, at 784 (Harman J). 11 [2002] 1 WLR 448. 12 In a proprietary club arrears of subscription do not pose the same problem as in a members’ club. This is because at the end of the subscription year the proprietor can simply refuse to renew the contract of membership with a defaulting member. 13 In re Sick and Funeral Society of St John’s Sunday School, Golcar [1973] 1 Ch 51, at 62–63. 14 This will still leave the member liable for any arrears of subscription.

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Expulsion: members’ clubs 7.11 less draconian by stipulating in the rules (or in the bye-laws) that the member will receive in writing a reminder that his subscription is overdue and a warning that his membership will automatically lapse if the arrears are not paid by a certain date. In a proprietary club a member’s failure to pay his subscription causes less of a problem in that at the end of the subscription period the proprietor can simply refuse to renew the contract of membership. 7.9 Where the membership has lapsed for non-payment of subscription, it is common practice to reinstate the member if he tenders the arrears and his current subscription. Is this reinstatement within the powers of the Committee, considering that it is now dealing with a non-member? Does not the ex-member have to apply for re-election? Mr  Justice Megarry in the Golcar case15 said that lapse of membership could be described as ‘tacit resignation’. Despite this dictum we consider that the Committee would have power in appropriate circumstances to reinstate lapsed membership on the basis that a lapse is quite different from a resignation; the former comes about through the member’s non-compliance with the rules relating to the payment of subscriptions, whereas the latter is a deliberate decision taken by the member. As the innocent party to the breach of contract the club (or the Committee on behalf of all the members) can waive the noncompliance with the subscription rule but it cannot undo the member’s resignation decision which will have taken effect on notification to the club. An exception might be where the notice of resignation was required to be, say, on 14 days’ notice. Here we consider that it could be withdrawn by mutual consent before the expiry of the 14-day period.

4.  Expulsion: members’ clubs 7.10 Need for express power If the rules of a members’ club are silent on the topic of expulsion of a member of the club, no such power will be implied into the rules.16 Provided there is provision to amend the rules, they would first have to be amended to give the club the necessary power to expel a member.17 In the absence of an expulsion rule it will not be possible as an alternative to convene a special meeting of all the members to discuss and then pass a resolution to expel a member. This is so even if every member of the club attended the meeting and voted unanimously for expulsion. The power to expel must always be expressly given in the rules. 7.11 The power to expel may be given to the membership as a whole but this is generally considered too cumbersome a procedure to be practical and so the power is usually devolved to the managing committee. A common (and proper) rule is one which states that the club shall have power to expel a member if his conduct, whether within the club premises or elsewhere, is injurious to the good name of the club or is such that in the opinion of the Committee it renders him

15 [1973] 1 Ch 51, at 62. 16 See Dawkins v Antrobus (1881) 17 Ch D 615, at 620 (Jessel MR at first instance). See 2.31 for the facts of this case. 17 Dawkins v Antrobus (1881) 17 Ch D 615, at 621.

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7.12  Cessation and Curtailment of Club Membership unfit to be a member.18 It is also good practice for the rules to state that pending the hearing of any case or complaint against the member the Committee shall have power to exclude the member from the club premises. This is not prejudging the case; it is simply an act of good management. This power of exclusion, however, must be expressly given in the rules. 7.12 Jurisdiction On the other hand, it is a matter for the court to decide whether the misconduct relied on has passed the jurisdictional or threshold test so as to justify expulsion and, if not, the club cannot rely thereon. In the Scottish case of Wiles v Bothwell Castle Golf Club19 the respondent club planned to relocate to a new site on its own land, the original clubhouse having been destroyed by fire. This involved the residential development of this site to finance the new clubhouse. This plan was overwhelmingly supported by the members. The petitioners, who were established members of the club, objected to the planning application and as a result they were expelled from the club. It was accepted by both parties that the Committee could rely on conduct occurring away from the club but Lord Glennie set aside the expulsion because the petitioners had a legitimate interest in their objection to the application and there was nothing vindictive or irrational in their opposition thereto; they were simply protecting their own rights. 7.13 In his judgment Lord Glennie gave a good example of the committee’s limit over the private or business dealings of the members:20 ‘If a catering company offered favourable terms to the club provided that members of the club used its services for their private weddings or other functions, it could surely not be argued that a member who declined to use the services of the caterer would be subject to disciplinary action (or expulsion from membership) at the hands of the Committee – even if, in consequence, the club lost the possibility of the favourable terms which had been offered and therefore the [member’s] conduct could be said to have endangered the interests of the club. 7.14 Procedure It is essential that the procedure laid down by the rules is strictly followed, otherwise the expulsion will be declared void.21 In Young v Imperial Ladies Club Ltd22 a notice was issued convening a special meeting of the executive committee ‘to report on and discuss the matter concerning Mrs Young and Mrs L’, but no notice was sent to the Duchess of Abercorn who had previously indicated that owing to other calls on her time she would not be attending committee meetings. The Committee met and decided to erase Mrs Young’s name from the list of members. At first instance Mr Justice Roche held that as the rules had been substantially adhered to and as there was no breach of the rules of natural justice, the omission to notify the duchess of the meeting did not invalidate the proceedings of 18 Dawkins v Antrobus (1881) 17 Ch D 615, at 616; Fisher v Keane (1878) 11 Ch D 353, CA, at 358. And see Hopkinson v Marquis of Exeter (1867) LR 5 Eq 63 (court upheld expulsion of plaintiff from a political club, namely, the Conservative Club, for changing his political views). 19 2006 SCLR 108 (the Outer House of the Court of Session). In his judgment Lord Glennie cited the English cases of Dawkins v Antrobus (1881) 17 Ch D 615 and Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329. 20 Wiles v Bothwell Castle Golf Club 2006 SCLR 108 at [25]. 21 See Speechley v Abbott [2014] EWCA Civ 230 (in which a failure to provide notice of the AGM in accordance with the club rules was fatal to the validity of the meeting’s decisions). And see 6.10. 22 [1920] 1 KB 81 and [1920] 1 KB 523, CA.

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Expulsion: members’ clubs 7.17 the Committee. The Court of Appeal allowed Mrs Young’s appeal on the grounds: (1) that the omission to summon the absent member of the Committee invalidated the proceedings of that body; and (2) that the notice did not state the object of the meeting with sufficient particularity. 7.15 It should be noted, however, that what swayed the Court of Appeal was the insufficiency of the reason for not summoning the duchess, namely, her expressed unwillingness to attend committee meetings. There may be a valid reason for not summoning a committee member, such as his confinement to bed with a serious illness or the impossibility of his attendance at the meeting because of the distance he would have to travel.23 However, far better would be an invariable practice to send out a notice to all committee members irrespective of whether it is known if this will result in their attendance. 7.16 So, too, the notice, which is given to the member summoning him before the Committee, must comply strictly with the rules. A  rule which provided for a notice of a certain number of days would not be complied with if it was given one day late; this non-compliance would then be fatal to any decision to expel the member.24 If the rules are silent as to the length of notice to be given to the member for attendance on the Committee, the notice must be of a reasonable length. 7.17 Evidence The more serious the allegation being made against the accused, the stronger must be the evidence in support, although the civil burden of proof will continue to apply, namely, the balance of probabilities.25 If the accused person requests that he be allowed legal representation and the rules do not provide for this contingency, this will be a matter of discretion for the club but in practice, depending on the nature or seriousness of the allegation, it is often advisable to permit such representation.26 There is no rule that fairness always requires an oral hearing,27 but if the Committee allows such a procedure it should permit crossexamination of witnesses to take place.28 A  question which sometimes arises in practice is whether the Committee, prior to a decision being made or a hearing taking place, is able to rely on different grounds for expulsion from those first communicated to the accused. Generally speaking, we consider the answer to be in the affirmative provided that the Committee gives proper notice of the changed grounds. It is a well-established rule in contract law that if wrong or inadequate grounds are given for refusing to perform a contract a party may yet justify his refusal if there are facts in existence which would have provided proper grounds.29 By a parity of reasoning the club would be entitled to rely on a later set of grounds in addition to or in lieu of its earlier ones. The Committee, however, may be

23 [1920] 1 KB 523, at 536. Contrast P (a minor) v National Association of School Masters Union of Women Teachers (NASUWT) [2003] UKHL 8 (where a union ballot was not invalidated by the accidental omission to send ballot papers to two members entitled to vote). 24 Labouchere v Earl of Wharncliffe (1879) 13 Ch D 346. See 6.11 for the facts of this case. 25 Re H [1996] 1 All ER 1, HL, at 16 (Lord Nicholls). 26 A rule excluding legal representation at a hearing is not invalid as being contrary to natural justice: Enderby Town Football Club v Football Association [1971] Ch 591, CA. 27 Local Government Board v Arlidge [1915] AC 120, at 132; R v Army Board [1992] QB 169, CA, at 187; and see In re Reilly Osborn and Booth v Parole Board [2013] UKSC 61, at [81] on the circumstances in which a hearing may be required. 28 Bushell v Secretary of State for the Environment [1981] AC 75, at 116 (Lord Edmund-Davies). 29 Andrews v Mitchell [1905] AC 78; Panchaud Frères SA v Etablissements General Grain Company [1970] 1 Lloyd’s Rep 53, CA, at 56.

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7.18  Cessation and Curtailment of Club Membership precluded from setting up a different ground where it would be unfair or unjust to allow the Committee to do this.30 7.18 Quorum and voting majority It is plain that the tribunal must be quorate when considering the issue of expulsion but it lends more weight to any decision if the relevant meeting is attended by a large number of the Committee or members, as the case may be. It is normal practice to require that a decision to expel a member must be carried by at least a two-thirds majority of the members present at the meeting, although occasionally a three-quarters majority is preferred. The same voting majority should be used for any appellate process. 7.19 Good faith The decision to expel must be taken by the Committee acting in good faith, that is, acting for the benefit of the club as a whole and not for some section or faction thereof,31 and must of course come within the powers granted by the rules. Being an internal matter, and so long as the decision was honestly made within the rules32 and, semble, was not so unreasonable as to be perverse33, the court will not interfere with the Committee’s decision even if the court considered it was wrong.34 On the other hand, it is highly unlikely that a court would accept as enforceable any rule which gave a power of expulsion which had retrospective effect;35 such a rule would in any event be unacceptable to the membership at large. 7.20 Rules of natural justice Subject to one caveat, in dealing with any case which concerns the possible expulsion of the member, it is important that the rules of natural justice are applied to the proceedings. A power of expulsion has been described as being of a quasi-judicial nature.36 These rules are encapsulated in three propositions:37 (1)

the right to be heard by an unbiased tribunal;38

(2)

the right to have notice of the charge of misconduct;39 and

(3)

the right to be heard in answer to that charge.40

30 See Panchaud, at 56–57. 31 Woodford v Smith [1970] 1 WLR 806, at 816; Lambert v Addison (1882) 46 LT 20, at 25; Tanussi v Molli (1886) 2 TLR 731 (concerning the Italian Couriers Club). 32 Lyttelton v Blackburne (1876) 45 LJ Ch 219, at 223. 33 Associated Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. 34 See 5.27. 35 Dawkins v Antrobus (1881) 17 Ch D 615, CA, at 632. 36 Fisher v Keane (1879) 11 Ch D 353, CA, at 360. 37 Ridge v Baldwin [1964] AC 40, at 132 (Lord Hodson). 38 Nemo judex in causa sua (No man should be a judge in his own cause): R  v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte [2000] 1  AC  119, and [2001] 1 AC 147; Re Medicaments and Related Class Goods (No 2) [2001] 1 WLR 700, at [37]–[38] (Lord Phillips MR), As to the test for bias, see 7.21. 39 Fisher v Keane [1879] 11 Ch D 353, CA (where the plaintiff member had been suspended from membership of the Army and Navy Club without prior notice being given to him); R v Governors of Dunraven School, ex p B (a child) [2000] ELR 156 CA (where the schoolboy claimant did not have proper advance notice of the theft allegation being made against him and his expulsion was set aside). 40 The audi alteram partem rule (Hear the other side): R  (X) v Chief Constable of West Midlands [2004] EWHC 61 (Admin) at  [113]–[132] (Wall J); Gray v Marlborough College [2006] EWCA Civ 1262 (where the schoolboy claimant was expelled by the headmaster because of numerous incidents of disobedience, lateness for lessons, smoking and drinking alcohol. There was a Review Panel chaired by a leading barrister and the claimant and his father attended these proceedings. The Court of Appeal held that the school’s disciplinary system was fair and the expulsion was upheld).

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Expulsion: members’ clubs 7.23 Any decision which was made in proceedings which did not operate these rules of natural justice will be invalid and liable to be set aside by the court.41 The rules apply equally to an honorary member as to an ordinary member.42 The caveat is that if the club were an incorporated one (which entails a large number of statutory rules governing the company and the rights of members) the court might not apply the rules of natural justice if there were sufficient indications that these rules were not to apply in any given case.43 7.21 Bias Bias is an attitude or point of view that colours one’s judgment. It is a predisposition to see things or people in a certain way and it often entails prejudice. The question arises whether those members who comprise the tribunal are disqualified from sitting on the case.44 The sitting test now favoured by the courts is whether ‘the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias’.45 In clubs a member of the Committee might well be acquainted with the accused person. Thus the member who is a close friend of the accused should not think it proper to sit if a quorum can be formed without him.46 On the other hand, it may be the size of the club or its administrative structure is such that it is inevitable that the composition of the tribunal gives an appearance of bias. If this be the case, necessity constitutes an exception to the rule against bias.47 7.22 Putting right errors: a fresh hearing Sometimes things go amiss and the managing committee or the appellate tribunal realise that mistakes have been made as to procedure or there has been non-compliance with the rules, and the question arises how to cure the problem. If looked at from the point of view of the member, he will on the face of things be entitled to go to court to obtain a declaration that the decision was invalid and of no legal effect by reason of the breach of the club rules or the rules of natural justice. That being so, the appellate tribunal (or the managing committee if there is no appellate tribunal) on being satisfied that the decision was defective as alleged, can simply remit the matter to the first instance tribunal without going into the merits of the appeal. In other words, the slate is wiped clean and the expulsion process starts afresh.48 Regrettably, these clear waters have been muddied by case law. 7.23 An alternative solution: a re-hearing on appeal Sometimes an alternative solution is to let an appeal go ahead and simply have a complete re-hearing at the appellate level. In 1971 this solution did not find favour with

41 Lee v The Showmen’s Guild of Great Britain [1952] 2  QB  329,  CA; Fountaine v Chesterton [1968] 112 Sol Jo 690 (cited in John v Rees [1970] Ch 345, at 398). Where the club rules expressly exclude the rules of natural justice (which would be very rare), such exclusion might well be unenforceable on the grounds of public policy: see Denning LJ in Lee’s case, at 342. 42 John v Rees [1970] Ch 345, at 398. 43 Gaiman v National Association for Mental Health [1971] Ch 317, at 335; and see 7.5. 44 See Flaherty v National Greyhound Racing Club Ltd [2005] EWCA Civ 1117. 45 Porter v Magill [2001] UKHL 67 at [103] (Lord Hope). See also the application of the test in Mitchell v Georges [2014] UKPC 43. 46 De Smith’s Judicial Review (8th edn, 2018) at 10-46. 47 Ibid, at 10-70–10-75. 48 Leary v National Union of Vehicle Builders [1971] 1 Ch 34, at 48E (Megarry J). In the same passage the judge said that there did not need to be a formal annulment of the first decision before starting afresh.

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7.24  Cessation and Curtailment of Club Membership Mr Justice Megarry in Leary v National Union of Vehicle Builders49 where, at 49, he stated: ‘If one accepts the contention that a defect of natural justice in the trial body can be cured by the presence of natural justice in the appellate body, this has the result of depriving the member of his right of appeal from the expelling body. If the rule and the law combine to give a member the right to a fair trial and the right of appeal, why should he be told that he ought to be satisfied with an unjust trial and a fair appeal? … As a general rule… I  hold that a failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body.’ In 1980 in Calvin v Carr50 (which concerned the disqualification of a jockey imposed under the Rules of Racing of the Australian Jockey Club) Lord  Wilberforce in the Privy Council considered that the above proposition was too broadly stated and went on, at 592, to say: ‘First there are cases where the rules provide for a rehearing by the original body, or some fuller or enlarged form of it. The situation may be found in social clubs. It is not difficult in such cases to reach the conclusion that the first hearing is superseded by the second or, putting it in contractual terms, the parties are taken to have agreed to accept the decision of the hearing body, whether original or adjourned. … At the other extreme are cases where, after examination of the whole hearing structure, in the context of the particular activity to which it relates (trade union membership, planning, employment, etc) the conclusion is reached that a complainant has the right to nothing less than a fair hearing both at the original and at the appeal stage. In 1987 in Lloyd v McMahon51 (where a district auditor issued a certificate of loss against certain councillors without first inviting them whether they wished to make oral submissions) Lord Templeman, at page 716, whilst agreeing with Lord Wilberforce, emphasised the last point: ‘And the defects in the inquiry conducted by the tribunal may be so prejudicial to the aggrieved person that the court in its discretion may decide to quash the decision and not proceed with an appeal.’ 7.24 In 2006, however, in Wiles v Bothwell Castle Golf Club52 the court held that the concept of clubs had moved on in that social and sports clubs on the one hand and trade and business associations on the other hand should no longer be put into separate categories and treated differently at law,53 and so it is arguable that Lord Wilberforce’s law distinction does not have the same force that it once did.54 It may be that Mr Justice Megarry’s view (see 7.23) will come to be generally accepted.

49 [1971] 1 Ch 34. 50 [1980] AC 574, PC. 51 [1987] AC 625. 52 [2006] SCLR 108. For further details of this case see 7.12. 53 See 5.27. 54 Calvin was followed in Modahl v British Athletic Federation Ltd [2001] EWCA Civ 1447 and Flaherty v National Greyhound Racing Club Ltd [2005]  EWCA  Civ 1117 (Court of Appeal cases) but, on the other hand, Leahy was followed in Shrimpton v The General Council of the Bar [2005] 11 WLUK 318 (Disciplinary tribunal of Lindsay, Blackburne and David Clark JJ).

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Expulsion: members’ clubs 7.27 7.25 Remedies for wrongful expulsion If a member of a club has any complaint about the expulsion process or the end result of that process, his remedy is contractual, which will involve a claim for a declaration that the expulsion was wrongful55 and/or an injunction to restore the claimant to membership and/or damages. It is now very unlikely that he will be entitled to seek a judicial review of the club’s actions since this is a public law remedy.56 7.26 Injunction An injunction is an equitable remedy granted where damages would be an inadequate remedy. It is now underpinned by statute,57 and is discretionary.58 This remedy can be used as a preventive measure if the facts warrant it.59 But can the club refuse to reinstate the member on the ground that a right of membership is of such a personal nature that the court will not enforce it by way of specific performance or injunction? According to Lord Justice Denning in Lee v The Showmen’s Guild of Great Britain60 a social club can put forward this argument and he cited the case of Baird v Wells61 in support. In fact, in the latter case Mr  Justice Stirling, at 676, held that the bar to an injunction was the now discredited doctrine that the plaintiff had no proprietary right to protect rather than the right of membership being too personal to be enforced.62 If the wrongfully expelled member desires it, it is common nowadays for reinstatement to be ordered by the court. Provided he acts without delay, and there is no real dispute as to the unlawfulness of the expulsion, the claimant can apply for an interim injunction to restore his membership. Because, however, an injunction is a discretionary remedy the court might be persuaded to refuse to grant an injunction, either interim or final, leaving the claimant to his remedy in damages. In Glynn v Keele University63 the plaintiff, an undergraduate, was fined £10 and excluded for a year from residence on the university’s campus by the university’s vice-chancellor for appearing naked in the university precincts. This penalty was imposed without the undergraduate being given any opportunity to be heard on the matter. The plaintiff appealed but was absent abroad on the date listed for his appeal, and the appeal committee confirmed the penalty. The plaintiff sued the university, claiming a declaration that the penalty was null and void, and damages. He applied for an interim injunction to restrain the university from excluding him from residence. The plaintiff did not dispute the facts on which the penalty was based. Pennycuick V-C held that the penalty was imposed in breach of the rules of natural justice but refused the injunction on the ground that the plaintiff had suffered no injustice. 7.27 Award of damages If an expulsion is declared unlawful or is set aside by the court, the claimant is restored to his original status and it will be as if there 55 Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329, CA: see 5.27. 56 R v Disciplinary Committee of the Jockey Club, ex p Aga Khan [1993] 1 WLR 909, CA, at 933 (Hoffmann LJ); see further 13.1–13.26 on the private law nature of clubs. See also Law v National Greyhound Racing Club Ltd [1983] 1 WLR 1302. 57 Senior Courts Act 1981, s 37 (which applies in the county courts by virtue of the County Courts Act 1984, s 38). 58 See eg  Baker v British Boxing Board of Control [2015]  EWHC  2469 (Ch), at [11] (Eady J) (where the claimant unsuccessfully sought an interim injunction to restore his boxing manager’s licence pending an action based inter alia on the Board’s irregular procedural unfairness). 59 Lee v The Showmen’s Guild of Great Britain [1952] 2 QB 329, CA, at 342. 60 Ibid, at 342. 61 (1890) 44 Ch D 661. 62 See Stirling J’s judgment cited in 8.2 where the judge is dealing with members’ proprietary rights. 63 [1971] 1 WLR 487.

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7.28  Cessation and Curtailment of Club Membership never had been any expulsion. This poses a conundrum. How can the claimant be compensated in damages for something which in the eyes of the law had never happened? On the face of things this would seem unjust on a person improperly deprived of his membership for the period between the date of expulsion and the date of restoration of membership or the date of declaration that the expulsion was invalid. In Chamberlain v Boyd,64 the plaintiff was an unsuccessful candidate for the Reform Club and brought a defamation action against a member who was alleged to have jeopardised his candidature by slanderous remarks. Lord Justice Bowen, at 415, cautiously observed: ‘Possibly the membership of a club may be a matter of temporal advantage, and the deprivation of it may be an injury or damage of which the law will take cognisance.’ In Collins v Lane, Cornish and Worcester Norton Sports Club Ltd65 the claimant, a retired police officer, was wrongfully expelled from the shooting club which was affiliated to the sports club, Mr Lane and Mr Cornish being respectively the chairman and secretary of the shooting club. Restoration of the claimant’s membership did not arise. Basing themselves on Chamberlain v Boyd the Court of Appeal awarded the claimant the avowedly modest sum of £250 for deprivation of membership in the particular circumstances of that case. Lord  Justice Beldam stated that by being deprived of his membership of the club in breach of the rules the claimant had lost something which was of value to him. The court rejected the club’s submission that the claimant was entitled to no more than nominal damages. So whatever may have been the legal position in earlier times, we consider that it can now be taken as settled law that a wrongful expulsion will in appropriate circumstances result in an award of general damages for the loss of amenity during the period of wrongful exclusion from the club or for wrongful deprivation of membership if the exclusion is of a permanent nature. There seems little doubt too that if the claimant has been wrongfully expelled, he would be entitled to claim the unexpired portion of his subscription by way of special damages.66 7.28 In Morris Motors Athletic and Social Club Ltd v Fraser67 the defendants counterclaimed for wrongful suspension from the club for some 16  months, except for one defendant, Mr  Butler, whose membership had been reinstated after two  months. All the defendants had been members of the club for many years before their suspension. HH Judge Charles Harris QC in a reserved judgment awarded the defendants general damages for wrongful suspension and had this to say: ‘Any approach to valuation is somewhat arbitrary. I  do not think that the monthly [amenity] value of the club can sensibly be measured by the level of the subscription, which was one possibility. A  St  James club, at £1,000 per annum, perhaps provides rather fewer facilities for its members than the Morris Motors Athletic and Social Club does at a tiny fraction of the price. Both might be equally valuable a facility in the eyes of their members. 64 (1883) 11 QBD 407. 65 [2003] LLR 19. 66 See, for example, 1.9 on loss of proprietary and social rights which might thus be included in the special damages. 67 (Unreported, 20  December 2006), Oxford County Court. See 5.60 for the facts of the claim against the defendants.

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Suspension 7.31 However, given the lack of detail about how much use the defendants in fact made of their club [save in the case of Mr  Butler], it is clearly appropriate not to value their loss too highly. [The sum of] £10 a week for 16 months produces £640, which seems to me to be a reasonable sum in respect of all the defendants, save Mr Butler. I propose to award £650 to each of them. For Mr Butler £10 per week would only produce £80, a figure I consider too low for a man who used the club daily. I propose to award him £200.’ 7.29 We point out that if the wrongfully expelled member is reinstated to membership, the Morris Motors Club case provides useful guidelines for evaluating his temporary exclusion from the club. If, however, the club successfully resists the reinstatement of the claimant’s membership, the quantum of general damages for the wrongful expulsion will no doubt be increased to reflect this future loss of amenity, and may well include damages for loss of status, if the club is of some renown. The nature and surrounding circumstances of the wrongful expulsion will also be taken into account in assessing the general damages.

5.  Expulsion: proprietary clubs 7.30 The proprietor of a club is liable in damages for his act or the act of the Committee in wrongfully expelling a member.68 This is because the contract of membership contains an implied term that a member, once admitted to membership, shall not be excluded by the owner save in accordance with the rules, and damages will lie for any breach of this term.69 As with members’ clubs, the power to expel must be the subject of an express rule. Once again, a proprietor has fewer problems on this score in that if, as is the norm, the membership is held on an annual basis, he has the option of simply refusing to renew the contract of membership on its expiry date.

6. Suspension 7.31 Overview Everything said about expulsion applies with equal force to suspension.70 Although the powers of expulsion and suspension usually go hand-inhand in the rules, we consider that a power to expel would not of itself include the power to suspend. Suspension is of a different nature to expulsion and is not simply a paler version thereof. Expulsion terminates membership, whereas suspension allows it to continue. Accordingly, a power to suspend the member must be expressly given in the rules. It has been said that if the conduct complained of is of a serious nature it would be in order for the committee to suspend the member,

68 Young v Ladies’ Imperial Club Ltd [1920] 1 KB 81, at 87, a finding apparently upheld on appeal [1920] 2 KB 523. 69 Abbott v Sullivan [1952] 1  KB  189,  CA, at 219. And see Re Curzon Syndicate  Ltd (1920) 149 LT Jo 232 (where the proprietors of the Ladies United Services Club closed it without notice to the members. On the winding up of the company which owned the club, the members were held by Lawrence J to be entitled to prove in the liquidation for: (a) the amount of the entrance fee (see 4.34); (b) the unexpired portion of the subscription; and (c) damages for loss of the amenities of the club during the unexpired portion of the subscription). 70 John v Rees [1970] Ch 345, at 396.

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7.32  Cessation and Curtailment of Club Membership even in the absence of a specific power of suspension, until a proper enquiry can be completed,71 but this is doubtful because until a member is proved guilty of misconduct he is entitled to assert his innocence and thus enjoy the privileges of membership, subject to an authorised act of management such as excluding the member from the clubhouse pending the hearing of the case or complaint. 7.32 Consequences of suspension Suspending a member is shorthand for saying that the member loses all the privileges and rights of membership for the period of suspension. One of the privileges or rights of membership is the holding of office within the club or becoming a member of the Committee. If the suspension occurs during a period of office, the member must stand down from that office. That much is clear. What is not so clear is whether a suspended member can be nominated or elected to an office or to the Committee. We consider that as a matter of law this is possible because the suspended member still retains his membership.72 Upon election, however, the suspended member will be unable to assume office and this would be highly inconvenient for the management of the affairs of the club as well as undesirable as a matter of principle. Consequently, an express rule prohibiting nomination or election of a suspended member to any office or responsible position in the club is, we think, the proper solution to this problem. 7.33 Because the suspended member remains a member of the club he remains liable for his subscription or for any other authorised levy on the members. Can a suspended member still visit the club as a guest of another member? Most rules are silent on this point. We consider that the answer is in the negative because as a guest he would almost certainly be using the club’s facilities in one way or another during his visit and his suspension has taken away this privilege. Thus the change of status from member to guest cannot be used as a ploy to avoid the consequences of suspension. 7.34 Suspension should always be for a definite period, otherwise it may be tantamount to expulsion. It is common practice to limit suspension in the rules or in practice to a period not exceeding 12 months (or sometimes less) on the basis that if the member’s conduct deserves suspension for a longer period than this, the correct remedy is expulsion from the club. 7.35 Partial suspension Can suspension take the form of partial suspension of the member’s privileges? Rules never explicitly say this, merely that the club has the power to suspend the member. We take the view that as the greater includes the lesser there is nothing wrong in principle if the club deprives the member of some of his privileges of membership during the period of suspension rather than all his privileges. For example, the member may have been guilty of being unacceptably drunk at the club, in which case he might be banned from purchasing or drinking alcoholic drinks at the club bar for a period of some months whilst retaining the other privileges of membership. Could a similar ban on the member be imposed if he were found guilty of a drink/driving offence on his way home from the club? If the club had the usual rule that it could suspend the member for conduct which 71 Josling & Alexander, Law of Clubs (6th edn, 1987) p 40. 72 We call to mind John Wilkes (1727–1797) who was first expelled from Parliament in 1763 but re-elected in 1768 and again three times in 1769 despite his repeated expulsions from Parliament for libelling the King and government in his newspaper, North Briton. The problem was that Parliament could not deny the validity of his candidature.

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Appeals 7.37 took place elsewhere than the club’s premises and which was injurious to the good name of the club or rendered him unfit to be a member, we consider that a partial suspension based on a drink/driving offence would be upheld by the courts. If the member were convicted for a second time of a drink/driving offence we consider that the committee would be justified not simply in banning the member from the bar, but in imposing a full suspension, on the ground that drink/driving offences are not only criminal but amount to seriously anti-social behaviour.

7.  Disciplinary proceedings 7.36 Disciplinary powers, like the powers of expulsion and suspension, must be expressly granted in the club rules. They do not form a separate category in the sense that everything which is said about expulsion and suspension applies equally to disciplinary proceedings brought by the club against its members.73 Where disciplinary proceedings differ from expulsion or suspension proceedings is in the sanctions or penalties which are available to the disciplinary committee or tribunal. For example, on a complaint being proved, the Kennel Club has the power in appropriate cases to disqualify a member (and any non-member who agrees to submit to its rules) from judging or exhibiting at any dog show or competition, or to ban them from breeding dogs.74 In addition, disciplinary proceedings often contain the power to fine a guilty party, a sanction not relevant to expulsion or suspension. In Bradley v The Jockey Club75 Mr Justice Richards, at [43], commented on the tribunal’s role when imposing any penalty in disciplinary proceedings: ‘Of course, the issue in the present case is not one of procedural fairness but concerns the proportionality of the penalty imposed … The test of proportionality requires the striking of a balance between competing considerations. The application of the test in the context of penalty will not necessarily produce just one right answer: there is no single “correct” decision. Different decision-makers may come up with different answers, all of them reached in an entirely proper application of the test. In the context of the European Convention on Human Rights it is recognised that, in determining whether an interference with fundamental rights is justified and, in particular, whether it is proportionate, the decision-maker has a discretionary area of judgment or margin of discretion. The decision is unlawful only if it falls outside the limits of that discretionary area of judgment.’

8. Appeals 7.37 Many rules make provision for an appeal against expulsion or suspension or a disciplinary sanction. In Richardson v London Borough of Ealing76 Lord Justice 73 If the disciplinary sub-committee exercises power over non-members of the club by virtue, say, of some contract (eg  as the Kennel Club does) or of some royal charter (eg  as the Jockey Club did until 2007), it is important that its rules and procedures scrupulously avoid any unfairness or apparent bias. 74 See Colgan v the Kennel Club (Cooke J) (unreported, 26 October 2001), cited in Bradley v the Jockey Club [2004] EWHC 2164 (QB) at [71]. 75 [2004] EWHC 2164 (QB), upheld on appeal: [2005] EWCA (Civ) 1056. 76 [2005] EWCA Civ 1798.

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7.38  Cessation and Curtailment of Club Membership Ward stated at [20]: ‘It is, after all, to be firmly accepted that a re-hearing is an exception to the general rule; that some injustice must have occurred, and a simple failure to put one’s case before the first court is not ordinarily to be cured by a re-hearing’. In the absence of exceptional circumstances or unless the rules say to the contrary, an appeal is a review of the first instance decision, not a complete re-hearing. To this extent the appellate tribunal has a restricted role. It should not upset any original findings of fact unless there was no evidence to support that finding or unless the finding was against the weight of the evidence as a whole.77 It is also common for clubs to have no appeal procedure written into their rules. In this event, we consider that the Committee would be acting within its managerial powers to permit an ad hoc appeal, if the circumstances warranted it. The appeal procedure can take several forms under the rules. Sometimes the rules cater for a specially constituted appellate tribunal; at other times the Committee acts as the appellate tribunal or maybe the members in special meeting act as the appellate tribunal. If at all possible, the appellate tribunal should consist of different members from those who sat at first instance but this is not essential as a matter of law.78 Some clubs include in their rules a provision whereby the appellant member is entitled to representation, legal or otherwise; we consider this to be a good practice and indeed clubs without such a provision in their rules should normally allow, on a concessionary basis, the attendance of a representative if this is requested.

9.  Breach of bye-laws 7.38 It is a common practice for clubs to impose a modest or reasonable fine if the member is either in substantial breach of the bye-laws or is a persistent offender in a small way. The maximum fine should be stipulated in the rules or bye-laws. Enforcement of such a fine, if one is imposed, may be possible only by the expulsion of the member from the club.79 Although in the ordinary course of events dealing with a breach of the bye-laws is a much less serious matter than dealing with expulsion or suspension, which can terminate or curtail the member’s privileges of membership, nevertheless the rules of natural justice as set out in 7.20 must be followed, albeit in a less formal way than with the expulsion or suspension process. We do not consider that a system of review or appeal is a necessary or desirable adjunct of giving the Committee power to impose a fine for breach of the bye-laws.

10.  Reprimand and warning 7.39 A  reprimand of a member by the Committee over his misbehaviour in the club and/or a warning that such misbehaviour must not be repeated is on a different footing from expulsion or suspension because it does not involve any loss of the privileges of membership. The Committee’s powers in this respect are sometimes given expressly in the rules but, if not, we consider that as part of its management of the club’s affairs the Committee would have an inherent right

77 Bank of Credit and Commerce International (Overseas)  Ltd v Akindele [2001] Ch  437,  CA, at 448. 78 Leary v National Union of Vehicle Builders [1971] 1 Ch 34, at 48; Harrods Ltd v Harrodian School Ltd [1996] RPC 697, CA, at 729 (Beldam LJ). 79 See Barker and Stevens, Club Law Manual (2nd edn, 2011) p 126.

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Discrimination affecting membership 7.40 to reprimand or warn any member about the standard of his behaviour. As with the breach of bye-laws, we do not consider that a system of review or appeal is a necessary or desirable adjunct of the Committee’s power to reprimand or warn a member.

11.  Discrimination affecting membership 7.40 The relevance of the Equality Act 2010 to this chapter is the protection of members and associate members who have certain personal characteristics and, as a result of which, the member might find himself expelled from the club and the associate member might find himself denied entry into the club. The full list of protected characteristics is set out in 4.21. The meaning of discrimination and victimisation is set out in 4.23 and 4.25 respectively. An associate is defined in 4.14. The protection in this context is as follows: (1)

the club must not discriminate against80 or victimise81 a member by depriving him of membership;

(2) the club must not discriminate against82 or victimise83 an associate by depriving him of his rights as an associate. The remedies available for unlawful discrimination are set out in 4.26.

80 81 82 83

Equality Act 2010, s 101(2)(b). Ibid, s 101(6)(b). Ibid, s 101(3)(b). Ibid, s 101(7)(b).

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Chapter 8

Ownership of the Club’s Property

1. Introduction 8.1 Whereas no person would in the ordinary course of events join a club merely to see what assets he could acquire as a result of his membership, it is not an uncommon feature of a club that during its lifetime or on its demise there arise questions of the true ownership of the club’s assets. This may occur because a developer makes an attractive offer to purchase the club premises, thereby resulting in a windfall profit, or the club may founder through lack of members whilst retaining an undistributed fund of money. Those in charge of running the club therefore need to understand how the law works when it comes to the ownership of assets.

2.  Unincorporated members’ clubs 8.2 Beneficial ownership of assets It is not always easy to discern where the legal and beneficial ownership lies in respect of assets and property held by these clubs. In Baird v Wells1 (concerning the plaintiff’s expulsion from membership by the decision of the committee of the Pelican Club, a proprietary club owned by the defendant) Mr Justice Stirling explained, at 675, why the members of members’ clubs commonly have more than personal rights: ‘In all cases of this nature, in which up to the present time an injunction has been granted, the [members’] club has been one of the ordinary kind, ie it has been possessed of property (such as a freehold or leasehold house, furniture, books, pictures, and money in the bank), which was vested in trustees upon trust to permit the members for the time being to have the personal use and enjoyment of the club-house and effects in and about it. But the interest of the members is not confined to that purely personal right. The members might, if they all agreed, put an end to the club; and in that case they would be entitled, after the debts and liabilities of the club were satisfied, to have the assets divided among them. In the present case the club, as such, has no property. The club-house and furniture belong to the

1

(1890) 44 Ch D 661.

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8.3  Ownership of the Club’s Property Defendant Wells, and by him subscriptions are taken. He is not a trustee, but the owner, of the property.’ Let us assume that the Basset Constitutional Club, an unincorporated members’ club, is possessed of property such as is described by the judge. Who actually owns all this? The simple answer would appear to be the members of the club and, in the absence of any contrary indication, that would be the right answer. But this simple answer begs the question: On what legal basis is this ownership founded? It is this question which we try to answer below. 8.3 General propositions We consider that the following 14 propositions can be established: (1)

the legal position is today governed solely by the law of contract2 and not by the law of trusts or other equitable doctrine;3

(2)

in deciding any question of ownership, one must first look at the contractual rules to see what they say on the subject.4 Provided they are lawful,5 express rules must be followed;

(3) in the absence of any words which purport to impose a trust, any funds flowing into the club, eg by way of subscription, fund-raising or gift, would count as an accretion to the general funds of the club;6 (4)

if the rules are silent on the question of ownership, the club’s assets belong to the existing members of the club in common beneficial ownership;7

(5)

this common ownership is neither a joint tenancy nor a tenancy in common so as to entitle the member to an immediate distributive share;8

(6)

the member’s interest in the club’s assets lasts only so long as his membership lasts.9 Once his membership ceases, for whatever reason, eg  resignation, expulsion or death, his interest ceases;10

(7)

a member’s interest is not transmissible,11 nor does it pass to his estate when he dies, even though he was a member at the date of his death;12

(8)

the members of the club can vary the rules as to ownership of assets, in the same way as any other contract may be validly varied, if the members are all

2

In re Bucks Constabulary Widows’ and Orphans’ Fund Friendly Society (No 2) [1979] 1 WLR 936 (‘Bucks Constabulary’) at 952 and 953. 3 In re Gillingham Bus Disaster Fund [1958] Ch 300, at 313 (Harman J); Tierney v Tough [1914] 1 IR 142, at 155–156 (O’Connor MR). 4 Bucks Constabulary, at 943. 5 That is to say, they do not contain rules which offend, eg against the principles governing alienability or perpetuity. 6 In re Recher’s Will Trusts [1972] Ch 526, at 539. 7 Murray v Johnstone (1896) 23  R  981, at 990 (Lord  Moncrieff); Brown v Dale (1878) 9 Ch D 78. 8 In re Recher’s Will Trusts [1972] Ch 526 at 538 (Brightman J). See 8.6 and 8.27 for further reference to this case. 9 Murray v Johnstone (1896) 23 R 981, at 990. 10 Bucks Constabulary, at 943. Thus, in respect of a gift to existing members, on the death or resignation of an existing member, his share could not be severed but would accrue to the other members, even though such members included persons who had become members after the gift took effect: Re Horley Town Football Club, Hunt v McLaren (2006) WTLR 1817. 11 In re St James’ Club (1852) 2 De GM & G 383, at 387 (Lord St Leonards LC). 12 Murray v Johnstone (1896) 23 R 981, at 990.

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Unincorporated members’ clubs 8.3 agreed (or, if the rules so allow, by a majority vote); and provided there is in the ordinary course of events no private trust or trust for charitable purposes which hinders this process;13 (9) the managing committee or the club’s trustees can in the course of their duties:14 (a) put the club’s assets at risk from creditors’ claims under contracts made with the club; (b) cause third parties to obtain contractual or proprietary rights over the club’s property, eg by the club taking out a mortgage; (c) declare with the consent of the members a valid trust in respect of some or all of the club’s property; (10) once a club ceases to function as a club, the right of a member to obtain realisation and distribution of the club property crystallises once and for all;15 (11) in the absence of any rule to the contrary, a term is implied into the contract subsisting between all the members that the club’s surplus funds should on dissolution belong to the then existing members;16 (12) the distribution on dissolution should in principle be in equal shares to all persons who were members at the date of dissolution,17 but could be on some other basis, if the rules or the facts warranted it;18 (13) where the rules have written into them some basis of inequality among the different classes of members in relation to their contractual burdens and benefits of membership (eg  different rates of subscription for town and country members or different rates for senior and junior members), this

13 In re Recher’s Will Trusts [1972] Ch 526, at 539. 14 Bucks Constabulary, at 940. See further 8.25 for trusteeship. 15 Abbatt v Treasury Solicitor [1969] 1 WLR 561, at 567 (Pennycuick J: not overruled on this point) and see Keene v Wellcom London Ltd [2014]  EWHC  134 (Ch) (where it was held that the unincorporated association’s assets on dissolution should be divided among the members in proportion to the subscriptions they had paid during the last three years of membership). 16 Bucks Constabulary, at 952. 17 Bucks Constabulary, at 952; In re  St  Andrew’s Allotment Association [1969] 1  WLR  229 (Ungoed-Thomas J); Feeney and Shannon v MacManus [1937] IR 23, at 33 (Johnstone J). In the case of In re the Sick and Funeral Society of St John’s Sunday School, Golcar [1973] Ch 51 (‘Golcar’) Megarry J  said, at 60, that in principle there was no difference between the newest member of one year’s standing and another member of 50 years’ standing: ‘Each has had what he had paid for: the newest member has had the benefits of membership for a year or so and the oldest member for 50 years. Why should the latter, who for his money has had the benefits of membership for 50 times as long as the former, get the further benefit of receiving 50 times as much in the winding up?’. See also Hardy v Hoade [2017] EWHC 2476 (Ch) (concerning North Harrow Tennis Club) at 8.12. 18 In re GKN Bolts & Nuts Ltd (Automotive Division) Birmingham Works Sports & Social Club [1982] 1 WLR 774 (Megarry V-C) (where only the full members were held entitled to participate in the surplus funds to the exclusion of other classes of member such as the honorary members and the temporary members); Keene v Wellcom London Ltd. [2014] EWHC 134 (Ch) (Peter Smith J) (where it was held that the unincorporated association’s assets on dissolution should be divided among the members in proportion to the subscriptions they had paid during the last three years of membership).

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8.4  Ownership of the Club’s Property inequality would normally follow into the distribution of surplus funds of the club on dissolution;19 (14) if the club has become moribund, for example, because all the members have died or are untraceable, the assets will accrue to the Crown as bona vacantia, that is, treated as ownerless.20 8.4 If the club dwindles to one member it will cease to exist as a club21 and the one remaining member will be beneficially entitled to its assets without restriction as to its use. In Hanchette-Stamford v Attorney General,22 it was held that the claimant as the sole remaining member of the unincorporated association, the Performing and Captive Animals Defence League, was so entitled. 8.5 Disposal of club property Because each member has an interest in the club property there is no power for the Committee of the club or for a majority of the members to dispose of club property against the wishes of a minority, unless it can be said that the disposal was authorised by the rules of the club and was consistent with the purposes of the club. This principle is well illustrated by the Scottish appellate case of Murray v Johnstone23 which, it is submitted, would have equal application in English law. In that case a silver cup was presented to the curling clubs of Dumfriesshire and these clubs, which were unincorporated, framed rules under which the cup was to become the property of the club which won the cup twice in succession. In 1893 the Upper Annadale Club did so win and the members of that club at a subsequent general meeting resolved to present the cup to Mr Johnstone who was the club’s star player. Mr Murray and four other members of the club brought an action against Mr Johnstone for the return of the cup to the club. The court granted the relief sought and Lord Moncrieff, at 990–991, stated the law as follows: ‘But the question is, had a majority [of members] the powers to do so against the wishes of a substantial minority? I am of the opinion that it was beyond the powers of a majority of the club to alienate the trophy… In the present case if they [the members] had merely resolved that the cup should be held for the club by the defender [Mr Johnstone] as long as he remained a member, the resolution might have been justified as a reasonable act of management. But what is proposed is to alienate the club’s property, and this I think cannot be done by the vote of the majority. In the course of argument it was urged that [on] this view it would be illegal for a majority of the members of a club to make a present out of the club funds to a secretary on his retiring, or to an old servant, or to present a medal or other prize to a member. Such a question seldom, if ever arises. If the gift proposed is substantial, it is usually made or eked out by private subscription among the members. If it is trifling, nobody objects. But if objection were taken by a minority, each case would depend upon its own circumstances, and fall to be decided according as the gift was or was not fairly authorised by the constitution and purposes of the club. 19 The Golcar case (where a per capita basis was applied save for child members who were to receive a half share only because their contributions to the society were payable at half the adult rate). 20 Ibid, at 942 and 943; Cunnack v Edwards [1896] 2 Ch 679, CA; Re Trusts of the Brighton Cycling and Angling Club (1953) Times, 29 April. 21 See the first criterion at 1.1. 22 [2008] EWHC 330 (Ch) (Lewison J). 23 (1896) 23 R 981.

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Unincorporated members’ clubs 8.8 Here what is proposed to be done is not to buy a prize or souvenir for the defender, but to present him with a valuable trophy, which was presented to the club as a body and intended to remain its property.’ 8.6 Bequests to the club This is a topic which demonstrates one of the potential disadvantages of an unincorporated members’ club. The general principles concerning such gifts or bequests were stated by Mr Justice Brightman in the case of Re Recher’s Will Trusts.24 In the course of his judgment, at 538, he gave some guidance on gifts and bequests to unincorporated associations: ‘A  trust for non-charitable purposes [in relation to such gifts or bequests], as distinct from a trust for individuals, is clearly void because there is no beneficiary [of legal standing]. It does not, however, follow that persons cannot band themselves together as an association or society, pay subscriptions and validly devote their funds in pursuit of some lawful noncharitable purpose. An obvious example is a members’ social club. But it is not essential that the members should only intend to secure direct personal advantages to themselves. The association may be one in which personal advantages to the members are combined with the pursuit of some outside purpose. Or the association may be one which offers no personal benefit at all to the members, the funds of the association being applied exclusively to the pursuit of some outside purpose. Such an association of persons is bound, I would think, to have some sort of constitution; that is to say, the rights and liabilities of the members will inevitably depend on some form of contract inter se, usually evidenced by a set of rules.’ 8.7 Later in his judgment, at 539, Mr Justice Brightman explained how gifts and bequests could legitimately swell the coffers of an unincorporated association such as a members’ club: ‘The funds of such an association may, of course, be derived not only from the subscriptions of the contracting parties but also from donations from non-contracting parties25 and legacies from persons who have died. In the case of a donation which is not accompanied by any words which purport to impose a trust, it seems to me that the gift takes effect in favour of the existing members of the association as an accretion to the funds which are the subject-matter of the contract which such members have made inter se, and falls to be dealt with in precisely the same way as the funds which the members themselves have subscribed. So, in the case of a legacy. In the absence of words which purport to impose a trust, the legacy is a gift to the members beneficially, not as joint tenants or as tenants in common so as to entitle each member to an immediate distributive share, but as an accretion to the funds which are the subject-matter of the contract which the members have made inter se.’ 8.8 It may be gleaned from the above quotations that the problem arises when the gift or bequest to an unincorporated club or association is made subject 24 [1972] Ch 526; and see Neville Estates Ltd v Madden [1962] Ch 832, at 849 (Cross J). 25 See Tierney v Tough [1914] 1 IR 142 (O’Connor MR) (where the benefit society’s fund was made up of contributions both from the canal company-employer and from the boatmenemployees and, on the society’s dissolution, the employer’s contributions were held to be absolute gifts to the society).

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8.9  Ownership of the Club’s Property to a trust. The topic of trusts in relation to unincorporated members’ clubs is by no means straightforward26 and any donor would be well advised to seek legal advice before making a substantial gift or bequest to the club. Take, for example, Philippe v Cameron27 where Mr Justice Arnold said in paragraph  1 of his judgment, ‘The immediate cause of the dispute is the challenge which the complexities of English law to trusts and unincorporated associations pose even for lawyers’. The facts demonstrate this point. In 1938 land in Cheam was bought and gifted in the sum of £450 to the local Presbyterian Church by David Tweddle. The purpose of the gift was to provide land for a tennis club used by members of the church. A lease of the land was granted by the church to St Andrew’s Tennis and Social Club, an unincorporated members’ club, accompanied by a trust deed. By 2010 very few members of the club were members of the church. The land was now worth some £1.2 million and a dispute arose between the church and the tennis club over the beneficial ownership of the land. The court held that the trust deed was void for perpetuity; there was no implied trust for the church; there was no resulting trust for the tennis club; the land did not pass to the Crown as bona vacantia; and consequently the land was held on resulting trust for the estate of the settlor Mr Tweddle who had died in 1953. 8.9 The rule against perpetuity Built into the problem of trusts is the rule against perpetuity.28 The law holds that private (ie non-charitable) trusts may not continue indefinitely.29 The rule has two limbs: (a) the rule against the remoteness of vesting (which affects ‘people’ trusts); and (b) the rule against inalienability (which affects ‘purpose’ trusts).30 The first limb prevents the vesting of the gift at too remote a time in the future and the second limb prevents the income of the trust being tied up for too long a time. 8.10 The Perpetuities and Accumulations Act  1964 helped unincorporated members’ clubs under the first limb. The Act permitted the club in an instrument taking effect after 15 July 1964 to treat the gift as valid until such time as it became established that the vesting must occur after the end of the perpetuity period, that is, after a life in being plus 21 years, alternatively after a fixed term of 80 years (the ‘wait and see’ rule).31 This meant that the gift would not fail for perpetuity but would vest in the current members who were ascertained within the perpetuity period.32 The Perpetuities and Accumulations Act  2009 has taken the matter a stage further. In the case of instruments taking effect on or after 6 April 2010 the perpetuity period is 125 years and no other period.33 This is so whether or not the instrument itself specifies a perpetuity period. 8.11 Cy-près clause It has become increasingly common for the rules to state that in the event of a dissolution of the club the surplus assets (that is, the assets remaining after all the club’s debts and liabilities have been met) should not be

26 See Hayton & Mitchell on Trusts and Equitable Remedies (14th edn, 2015) at 5-073–5-098. 27 [2012] 1 WLR 3847. 28 The rule against perpetuity is of general application, not limited to gifts or bequests made to unincorporated members’ clubs. 29 Hayton & Mitchell on Trusts and Equitable Remedies (14th edn, 2015) at 7-079. 30 Ibid, at 7-079. 31 Perpetuities and Accumulations Act 1964, ss 1(1) and 3(1). 32 40(1) Butterworths Encyclopaedia of Forms and Precedents (Lexis Library 2015 edn) at [706]. 33 Perpetuities and Accumulations Act 2009, s 5(1); Perpetuities and Accumulations Act 2009 (Commencement) Order 2010, SI 2010/37.

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Unincorporated members’ clubs 8.13 distributed to the members, which otherwise would be their entitlement,34 but will be transferred or given to some club or other organisation having the same or similar objects as the dissolving club (generally known as a cy-près clause35). This is a very effective remedy against carpet-bagging members who simply wish to dissolve the club for mercenary reasons,36 although no such rule can be entrenched immutably, unless the club is a charity37 or a community amateur sports club.38 Further, any lottery funding by the National Lottery is now contingent on the club having a cy-près type of dissolution clause in its rules. 8.12 Distribution of assets on dissolution This topic too can raise issues. How should a club deal with this distribution? In Re Blue Albion Cattle Society39 and Re St Andrew’s Allotment Association40 both judges postulated that in cases of friendly societies and mutual benefit societies the proper distribution of surplus assets on dissolution was based on a resulting trust, that is to say, based on the amounts contributed by each member. But in In re the Sick and Funeral Society of St John’s Sunday School, Golcar,41 an unincorporated members’ club, Mr Justice Megarry rejected this argument on the ground that membership of a club or association is primarily a matter of contract and that, because the resulting trust is a concept of property law, it was irrelevant to the division of a club’s assets on dissolution. Thus the correct distribution was one of equal shares, as set out at 8.3(12). In Hardy v Hoade42 the North Harrow Tennis Club, an unincorporated members’ club, operated three tennis courts with a pavilion but it had no floodlighting or car parking and thus had a lack of members. In 2013 it ceased functioning and in 2017 sought a court declaration as to the distribution of the net proceeds of sale of some £260,000. The court followed the Golcar case and Mr Edward Pepperall QC, sitting as a High Court judge, stated, ‘Accordingly, I am satisfied that the proper default position in the case of a tennis club is for the per capita distribution43 of the net assets among the members at the time of the club’s dissolution’. The judge, having applied the equal-share rule, then dealt with rule 18 of the club’s rules which laid down that in the event of discontinuance of the club’s activities any surplus should be distributed proportionately according to length of playing membership. In other words, the equal shares were adjusted or fine-tuned by a further rule. 8.13 Working men’s clubs All property belonging to a working men’s club, whether acquired before or after the club was registered under one of the Friendly Societies Act, shall vest in trustees of the club for the use and benefit of the club and

34 See 8.3(11) above. 35 The cy-près doctrine at common law applied where the charitable trust was impossible or impracticable to carry out and the court applied the charitable property as nearly as possible resembling the original trust: Snell’s Equity (33rd edn, 2014), at 23–048. For statutory regulation of cy-près schemes in charities, see Part 6 of Charities Act 2011. 36 This became a particular concern of many golf clubs in the 1980s, at a time when there was a considerable increase in the value of a club’s land and premises, as a result of which many such clubs adopted a cy-près clause. 37 For the club as a charity, see 1.43–1.46. 38 For the club as a CASC, see 1.47–1.59. 39 (1966) Guardian, 28 May. 40 [1969] 1 WLR 229 (Cross J). 41 [1973] Ch 51, at 59 (Ungoed-Thomas J). 42 [2017] EWHC 2476 (Ch). 43 Distribution per capita means distribution per head, that is, in equal shares.

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8.14  Ownership of the Club’s Property its members.44 However, if the club becomes defunct through having no members any surplus funds will belong to the Crown as bona vacantia.45

3.  Incorporated members’ clubs 8.14 Community club Being incorporated under one of the former Industrial and Provident Societies Acts or under the Co-operative and Community Benefit Societies Act  2014 means that this type of club can hold assets and property in its own name as the legal and beneficial owner, although it is common for such assets and property to be vested in trustees for the use and benefit of the club and its members.46 The club’s rules will give some guidance as to the investment of funds and distribution of profits because these matters must be provided for in the rules.47 It is to be noted that, unlike a company club under the Companies Act, no problem arises over this incorporation since it was originally designed as a procedural improvement only. 8.15 Membership of a community club is by ownership of at least one share. The rules of the club regulate the shareholding and will state the limit on how many shares may be held, their nominal value and whether they are withdrawable or transferable.48 If withdrawable, the rules must provide for the mode of withdrawal and the payment of the balance due on withdrawal.49 If transferable, the rules must provide for the form of transfer.50 There is no statutory requirement that a community club must issue a share certificate and generally speaking the rules seldom provide for this. A member has the right to nominate a person to become entitled at his death to his property in the club, and this may comprise shares, loans, deposits or otherwise.51 The rules must make provision for the payment of nominees.52 The statutory limit as to the amount of the nomination is £5,000 and if the member holds more than £5,000 in the society at the date of death the nomination is valid only to the extent of £5,000.53 8.16 The question of the beneficial ownership of the club’s property on dissolution, as with an unincorporated members’ club, is governed by the rules.54 Where the club is dissolved by a deed of dissolution,55 the deed must state how it is intended to divide the funds and property of the club.56

44 Friendly Societies Act 1974, s 54. 45 Cunnack v Edwards [1896] 2 Ch 679. 46 See Addiscombe Garden Estates  Ltd v Crabbe [1958] 1  QB  513,  CA as an example of a community club’s property being held by trustees. 47 Co-operative and Community Benefit Societies Act 2014, s 14 (Rules 12 and 14). 48 Ibid, s 14 (Rules 7, 9 and 11). 49 Ibid, s 14 (Rule 9). 50 Ibid, s 14 (Rule 9). 51 Ibid, s 37(1). 52 Ibid, s 14 (Rule 11). 53 Ibid, s 37(4). 54 See eg  Boyle v Collins [2004]  BCLC  471, a case concerning the Luton Labour Club, a working men’s club incorporated as a community club (where four members applied to be appointed trustees of the club to administer the distribution of the surplus assets upon its dissolution, and where Lewison J gave detailed directions based on the rules). 55 See 3.21(4). 56 Co-operative and Community Benefit Societies Act 2014, s 119(2)(d).

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Incorporated members’ clubs 8.19 8.17 Company club A  club incorporated under one of the Companies Acts has its own legal personality distinct from its members.57 This separate personality means that the club itself can legally own property acquired through purchase or gift. A vital distinction has to be drawn between the member’s contractual rights under his contract of membership and his statutory rights under the Companies Acts or the Insolvency Act 1986. In other words, we are here talking about beneficial ownership as opposed to legal ownership. 8.18 A  company club is still a members’ club and the members’ rights as between themselves are governed by the club rules.58 Any express rules as to the ownership or distribution of the club’s assets must be followed. The rules may provide for the company itself to hold the assets on trust for the members or the company may appoint trustees to perform this task, and this trusteeship must be acted upon as a matter of law. Where the company club’s position differs from the unincorporated members’ club or the community club is in the event that the rules of the company club are silent as to the beneficial ownership of the club’s assets. 8.19 Silence in the rules of an unincorporated members’ club or a community club will invoke the application of the propositions set out in 8.3. On the other hand, silence in the rules of a company club will bring into play the principles of company law. The property of a company in no sense belongs to the members of the company59 and it carries on its own business, not that of its members.60 In the ordinary course of events the company is not a trustee of its property for its members.61 In the absence of any trusteeship or contractual rights by virtue of the club rules, the members will have no property rights in the company’s assets at all. Their tangible rights are limited to when the company is wound up. In the absence of contractual rights under the club rules, the position will be governed by the members’ statutory rights under the Companies Acts and the Insolvency Act 1986, that is to say, if there are surplus assets once the company’s debts and liabilities have all been paid, they will be distributed among the members of the company according to their rights and interests in the company.62 This may result in the same distribution as would have occurred had the club been an unincorporated one. But this legal situation should awaken those running the club to the importance of having express contractual rules dealing with the ownership of the club’s assets and, in particular, the need for trustees. Provided the trust was set up when the company was fully solvent,63 a beneficiary under a bare trust of assets held by the company (or by the club’s trustees) as trustee has a proprietary interest in those assets and is not relegated to the position of an unsecured creditor.64 With a bare trust the property is ring-fenced in the event of the insolvent liquidation of the club because the basic principle is that only assets beneficially owned by the company fall to be administered and distributed to unsecured creditors in accordance with the winding-up legislation and rules.65 The property would not of course be ring57 Companies Act 2006, s 16(3); Salomon v Salomon & Co [1897] AC 22. 58 See 1.26. 59 Macaura v Northern Assurance Co Ltd [1925] AC 619. 60 Gramophone & Typewriter Co Ltd v Stanley [1908] 2 KB 89. 61 Butt v Kelson [1952] Ch 197, CA. 62 Insolvency Act 1986, ss 107, 143(1). 63 This eliminates the risk of the trust being set aside under whichever statutory regime is applicable on winding up. 64 Gore-Browne on Companies (45th edn, looseleaf) at 59[3]. 65 Insolvency Act 1986, s 144(1). And see Gore-Browne on Companies (45th edn, looseleaf) at 59[3].

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8.20  Ownership of the Club’s Property fenced from a secured creditor such as a mortgagee or debenture holder if monies had been lent to the club on the security of the property.66 8.20 As with unincorporated members’ clubs, if the company club wishes to transfer or give its surplus assets to persons other than the members on dissolution of the club, then provision must be made for this eventuality in the articles or in the club rules. This is a common occurrence in companies limited by guarantee. We add here that the distribution of assets in any direction takes place on the winding up of the company. By the time the company is dissolved all assets should have been duly distributed. This is important because on dissolution of the company all undistributed property is deemed to be bona vacantia and belongs to the Crown.67 8.21 Community interest company In the authorised articles of association68 article 3 is entitled ‘Asset Lock’ and states ‘The Company shall not transfer any of its assets other than for full consideration’, adding that it may transfer assets to a specified asset-locked body or, with the consent of the Regulator, to any other asset-locked body. Article 4 further states that ‘The Company is not established or conducted for private gain: any surplus or assets are used principally for the benefit of the community’. 8.22 Charitable incorporated organisation This organisation, being incorporated, has its own legal personality distinct from its members in the Association CIO. This separate personality means that the organisation itself can legally own property acquired through purchase or gift. In the authorised constitution69 clause 5 is entitled ‘Application of income and property’ and states ‘The income of the CIO must be applied solely towards the provision of the objects’ (which is subject to the benefits and payments expressly authorised by clause 6). On dissolution, subject to payment of its debts, the Association’s remaining assets must be applied for charitable purposes which are the same or similar to those of the Association.70

4.  Literary and scientific institutions 8.23 If the institution is unincorporated, during its lifetime its assets and property will be dealt with as any other unincorporated body. If incorporated under a royal charter (as a number have been), its trustees will no doubt hold the assets and property under a bare or charitable trust. If incorporated under the Companies Acts, its assets and property will be held either by trustees or by the institution itself. Upon dissolution, under section 30 of the Literary and Scientific Institutions Act 1854 any assets of the institution, which remain after the satisfaction of all its debts and liabilities, shall not be paid to or distributed among the members but shall be given to some other institution to be determined by the members at the time of the dissolution or, in default, to be determined by the county court.71 An 66 This mirrors the position of unincorporated clubs: see 8.3(9)(b). 67 Companies Act 2006, s 1012. 68 Model articles of association published by the Office of the Regulator of Community Interest Companies on 6 March 2019. See Appendix J. 69 ‘Association’ model constitution published by the Charity Commission for England and Wales on 1 October 2016. See Appendix K. 70 ‘Association’ model constitution, clause 29(2). 71 Literary and Scientific Institutions Act 1854, ss 29, 30.

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Trusteeship 8.26 exception is where the institution is a joint stock company,72 in which case the surplus assets may be distributed to the members.73

5.  Proprietary clubs 8.24 The proprietor is the sole owner of all the club’s assets and property with the members having no interest in them.74

6. Trusteeship 8.25 Overview As trusteeship is a common occurrence in members’ clubs, it is important for the members to understand the rudiments of this topic. An unincorporated members’ club is not a legal person and cannot hold the legal title to property, such as land and buildings, in its own name.75 Unless other arrangements are agreed, the legal ownership of these assets resides in the joint ownership of all the members who comprise the club for the time being. This would be impossibly inconvenient, hence the need for interposing a trust. But care needs to be taken over the choice of the other arrangements. In Jarrott v Ackerly76 an unincorporated members’ club called the Society of Automobile Mechanic Drivers of the United Kingdom, with a membership of over 2,000, purported to take an underlease of premises. This was executed by one of the members, Charles Dawson, ostensibly acting on behalf of the club. The head lease was subsequently forfeited, and the club’s trustees applied to the court for statutory relief under the Conveyancing and Law of Property Act 1892. Mr Justice Eve refused relief on the grounds: (a) that the underlease purported to be made to lessees who had no legal status so there never was in fact any underlease; and (b) that in any event the trustees not being parties to the underlease had no right to sue as underlessees. 8.26 Classification of trusts It may come as a surprise to the reader to learn that, although well-established in English jurisprudence and much used for several centuries, there is as yet no agreed classification of trusts.77 One way of looking at the situation is to put into a separate category bare (or simple) trusts and to treat all other trusts being special (or active) trusts.78 There is said to be a bare trust whenever the trustee holds trust property in trust for an adult beneficiary absolutely.79 The trustees will declare that they hold the club property upon trust for the (adult) members in accordance with the rules of the club80 and as directed

72 As defined in s 1041(1) of the Companies Act 2006. A joint stock company is one registered under one of the Joint Stock Companies Acts, a forerunner of the company limited by shares. 73 Literary and Scientific Institutions Act 1854, s 30; Re Bristol Athenaeum [1889] 43 Ch D 236 (held to be joint stock company); Re Russell Institution [1898] 2 Ch 72 (held not to be a joint stock company). 74 Baird v Wells (1890) 44 Ch D 661, at 676. 75 Hanbury and Martin on Modern Equity (21st edn, 2018) at 16-014. 76 (1915) 113 LT 371. 77 98 Halsbury’s Laws of England (2019) para 24. 78 Hanbury and Martin on Modern Equity (21st edn, 2018) at 2-034. 79 Ibid, at 2-034. 80 Bucks Constabulary [1979] 1 WLR 936, at 939.

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8.27  Ownership of the Club’s Property by the Committee.81 Under this arrangement the club’s property is vested in the trustees under a bare trust for the members as a whole.82 Here the trustees’ control over the trust property is minimal and the beneficiaries’ (members’) control is paramount.83 The trustees of a bare trust have no active duty to perform;84 they are merely the repository of the ‘bare’ legal title of the trust property and have at all times to comply with the directions of the beneficiaries acting through the Committee.85 And, indeed, the fact that the club property is vested in trustees on trust for the members is a quite separate matter and does not bear upon the contractual relationship as between the members themselves.86 Thus it can be seen why a bare trust has to be distinguished from a special or active trust where the trustees are charged with the performance of substantial duties in respect of the control, management and disposition of the trust property, coupled with fiduciary duties owed to the beneficiaries.87 A  charitable trust established under 8.3(9)(c) would count as a special trust as opposed to a bare trust. For practical reasons and by virtue of statute, in the case of land the number of trustees cannot exceed four.88 8.27 One other sort of trust needs briefly to be mentioned and that is a purpose trust. A trust may not be created simply for a purpose or object, that is, without ascertainable beneficiaries, unless it be charitable.89 Thus in Re Recher’s Will Trusts90 a testatrix by her will dated 23 May 1957 gave a share of the residue of her estate to the London and Provincial Anti-Vivisection Society, an unincorporated association, which had ceased to exist on 1 January 1957. Mr Justice Brightman held that this would have been a valid bequest to the members of the society but for the fact that the society had been dissolved before the date of the gift. But if the testatrix had left the money on trust to the society for the purpose of advancing the cause of anti-vivisection the gift would have failed since it was a non-charitable purpose and could not be construed as a gift to any person.91 (Under the Charities Act 2006 such a gift would now be construed as having a charitable purpose, namely, the advancement of animal welfare.92)

81 If the trust property is managed separately from the club’s general assets, eg managed by a company whose shares are held on trust for the members, difficulties may arise because neither the managing committee nor the members in general meeting will have any direct control over the trustees’ obligations. 82 Hayton & Mitchell Text, Cases and Materials on the Law of Trusts and Equitable Interests (14th edn, 2015) at p 188. 83 The beneficiaries have ‘the entire economic interest in the asset’: Jerome v Kelly (Inspector of Taxes) [2004] UKHL 25 at [2] (Lord Hoffmann). 84 Hanbury and Martin on Modern Equity (21st edn, 2018) at 2-034. 85 Ibid, at 2-034; Christie v Ovington [1875] 1 Ch D 279, at 281. 86 Bucks Constabulary, at 952. 87 Snell’s Equity (34th edn, 2019) at 21-2-3. 88 Trustee Act 1925, s 34, as amended by the Trusts of Land and Appointment of Trustees Act 1996, Sch 3, para 3(9). 89 Leahy v Attorney-General of New South Wales [1959] AC 457, at 478 (Viscount Simmonds). 90 [1972] Ch 526. 91 But see In re Lipinski’s Will Trusts [1976] 1 Ch 235 (Oliver J) (where the gift was not treated as a purpose trust but as an absolute gift to the members of an unincorporated, noncharitable association with a super-added (non-binding) direction as to how the money was to be used). 92 See 1.43 and Hanchette-Stamford v Attorney-General [2008] EWHC 330 (Ch).

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Trusteeship 8.30 8.28 The principal statute relating to trusts is the Trustee Act  1925, now augmented by the Trustee Act 2000.93 It is usual to appoint more than one trustee94 and the number of trustees must not exceed four.95 The club rules will also deal with the trustee’s tenure of office and make provision in the event of his resignation from the club or his retirement from office or his death. It is important that the rules contain a provision that the members in general meeting may resolve to remove a trustee, and a further provision that the Committee is the nominated person under section 36 of the Trustee Act 1925 to appoint a new trustee. The Judicial Trustee Act 1896 may also be important in respect of the appointment or removal of a trustee. 8.29 Powers and duty of trustees The powers conferred by the Trustee Act 1925 are in addition to the powers conferred by the instrument creating the trust,96 unless a contrary intention is shown.97 Under the Trustee Act 2000 trustees enjoy a much wider general power of investment than hitherto.98 This general power is in addition to powers conferred otherwise than by the Act99 but, on the other hand, it is subject to any restriction or exclusion set out in the trust instrument itself.100 The power is supported by a range of other powers whereby trustees can appoint agents,101 nominees102 and custodians,103 whom they can remunerate,104 and they have the ability to insure trust property.105 The safeguard for beneficiaries lies in the statutory duty of care which applies to trustees in the exercise of these wider powers, that is to say, a duty to exercise such care and skill as is reasonable in the circumstances, having regard to any special knowledge or experience that they have or hold themselves out as having.106 It should be noted, however, that the statutory duty of care only applies to the extent that the trust instrument permits this.107 Accordingly, the club rules should make appropriate provision as to the powers of the trustees to invest the funds of the club and as to their duties in exercising those powers. The power of investment is sometimes exercised at the trustees’ own discretion (with or without a cap on the value of the transaction) and sometimes on the direction of the Committee. 8.30 Protecting the trustees Trustees will have a lien over the trust property against all costs, expenses and liabilities properly incurred as trustee.108 It is essential, however, for the rules to make provision for the trustees to be indemnified against 93 Other Acts are Variation of Trusts Act 1958; Trusts of Land and Appointment of Trustees Act 1996 (as amended); and Trustee Delegation Act 1999 (as amended); Trusts (Capital and Income) Act 2013; and the Inheritance and Trustees’ Powers Act 2014. 94 Because a sole trustee cannot give a valid receipt for the proceeds of sale of land: Trustee Act  1925, s  14(2)(a), as inserted by the Trusts of Land and Appointment of Trustees Act 1996. 95 Trustee Act  1925, s  34(2)(a), as amended by the Trusts of Land and Appointment of Trustees Act 1996. 96 Re Rees, Lloyds Bank Ltd v Rees [1954] Ch 202. 97 Re Turner’s Will Trusts, District Bank Ltd v Turner [1937] Ch 15. 98 The trustee may make any kind of investment that he could make if he were absolutely entitled to the asset of the trust: Trustee Act 2000, ss 3 and 8(3). 99 Trustee Act 2000, s 6(1)(a). 100 Ibid, s 6(1)(b). 101 Ibid, s 11. 102 Ibid, s 16. 103 Ibid, s 17. In other words, a power to appoint professional trustees. 104 Ibid, s 32. 105 Ibid, s 34. 106 Ibid, s 1(1). 107 Ibid, Sch 1, para 7. 108 Trustee Act 1925, s 30; Re Beddoe [1893] 1 Ch 547, at 558.

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8.30  Ownership of the Club’s Property risk and expense out of club funds because the trustees cannot look to the members for an indemnity in the absence of such a rule.109 The trustees of a literary or scientific institution who, by reason of their being the legal owner of the institution’s building or premises, are liable for any payment of rates, tax, charges, costs and expenses, shall be indemnified by the governing body of the institution. In default of such indemnity the trustees are entitled to hold the building or premises as a security for their reimbursement and, to achieve this, may sell or mortgage the property.110 The trustees of a charity may apply to the Charity Commission for relief from liability.111

109 See Hayton and Mitchell Text, Cases and Materials on the Law of Trusts and Equitable Interests (14th edn, 2015) at p 332; Wise v Perpetual Trustee Co Ltd [1903] AC 139, at 149. 110 Literary and Scientific Institutions Act 1854, s 19. 111 Charities Act 2011, s 191 and see Operational Guidance OG 98, Power of Commission to relieve trustees, auditors, etc from liability for breach of trust or duty available from Charity Commission website.

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Chapter 9

Supply and Sale of Alcohol by the Club

1. Introduction 9.1 As mentioned in 1.8, members’ clubs have long enjoyed favourable treatment when it comes to the licensing laws. From 1964 until 2005, when the Licensing Act 2003 (‘the 2003 Act’) was brought into force, the supply of alcohol1 on club premises was regulated by Part  2 of the Licensing Act  1964 (‘the 1964 Act’) under a system which all are agreed worked reasonably well. However, the existing licensing laws were plainly in need of simplification and streamlining and the reform of the licensing procedures in 2003 repealed 22 Acts of Parliament and involved the consequential amendment of over 60 other Acts.2 Although retaining the broad distinction between clubs and premises such as pubs and bars which were open to the public at large, the 2003 Act fundamentally changed the basis on which clubs are regulated in the supply and sale of alcohol. Because of the complex nature of the changes the 2003 Act did not come fully into force until November 2005. 9.2 Summary of reform To understand the radical nature of the reform it is worth summarising how the licensing landscape changed: (1) all ‘licensable activities’, which includes the sale and supply of alcohol, regulated entertainment, some sporting activities, late night refreshment licences, theatres and cinemas: (a) require an authorisation of some sort; and (b) may be brought into a single licence at whatever venue. Hitherto there were six licensing regimes covering these matters; (2) the registration certificate was abolished. In its place is the club premises certificate; (3) the dual-authority of the justices’ licence was abolished; in its place is the premises licence and the personal licence (see below);

1

2

The 1964 Act referred to ‘intoxicating liquor’ (s  201(1)) whilst the 2003 Act refers to ‘alcohol’. The former expression is technically correct in that the brewing industry refers to water as ‘liquor’ but is rather pedantic, whilst the latter expression is shorthand for the more accurate expression ‘alcoholic drinks’. The meaning of alcohol is defined in s 191 of the 2003 Act, as amended by s 135 of the Policing and Crime Act 2017, as ‘spirits, wine, beer, cider or any other fermented, distilled or spirituous liquor (in any state)’ with certain exceptions such as perfume and alcohol in confectionery. Licensing Act 2003, Schs 6 and 7.

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9.3  Supply and Sale of Alcohol by the Club (4) these two principal authorisations (i.e. the club premises certificate or the premises licence) attach to the premises to which they relate. Hitherto the registration certificate attached to the entity (eg the registration certificate of the Basset Rugby Club) and the justices’ on-licence attached to the person (eg Bill Brewer, the licensee of the Basset Arms public house); (5)

the concepts of ‘permitted hours’, ‘extended hours’ and ‘special hours’ were abolished.3 In their place have come flexible hours to suit the individual premises;

(6) ‘occasional licences’ and ‘occasional permissions’ were abolished. In their place have come ‘temporary event notices’ (or ‘TENs’) which permit licensable activities on a temporary basis; (7) a ‘personal licence’ must be held by the individual in any premises taking responsibility for the sale of alcohol under a premises licence; (8)

the sale or supply of alcohol to children is the same for clubs as other licensed premises.4 It is a criminal offence to sell or supply alcohol to a person under the age of 18;5

(9) licensing by magistrates (sitting as licensing justices) was abolished. The licensing authority is now the local council. 9.3 One feature of club law should be noted. Parliament recognised that the supply of alcohol to a member in a members’ club was not a sale, although the member had paid money to obtain it. The property of the club belonged to all the members in common, and what might appear at first sight to be a purchase by the member was no more than a reimbursement of club funds.6 Accordingly, the 1964 Act prohibited the supply of alcohol to club members or their guests unless the club obtained a registration certificate from the magistrates’ court.7 Originally and on first renewal granted for one year, on the second or subsequent renewal the registration certificate could be granted for up to 10 years.8 In the absence of objection, there was only limited scope for refusing to grant or renew a certificate9 and this factor, coupled with its validity for 10 years, proved of great advantage to clubs. 9.4 Objectives of the 2003 Act Unlike any previous licensing legislation, the 2003 Act sets out objectives, which the licensing authorities must promote when carrying out their functions, namely:10 (1)

the prevention of crime and disorder;

(2)

public safety;

(3)

the prevention of public nuisance;

(4)

the protection of children from harm.

3

Licensed drinking hours were first introduced by the Licensing Act 1872 and then further restricted in World War I to discourage excessive drinking by the civilian population. 4 A surprising feature of the 1964 Act was its liberal approach on this matter. 5 Licensing Act 2003, ss 146–147B. 6 Graff v Evans (1882) 8  QBD  373,  DC; Trebanog Working Men’s Club and Institute  Ltd v MacDonald [1940] 1 KB 576, DC. 7 Licensing Act 1964, ss 39(1) and 40(1). 8 Ibid, s 40(2) and (3). 9 Ibid, ss 45 and 46. 10 Licensing Act 2003, s 4(2).

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Qualifying club activities 9.8 In addition, the licensing authority must have regard to the following in carrying out its functions:11 (5)

its own published statement of licensing policy;12

(6)

any guidance issued by the Secretary of State.13

9.5 The scheme of the 2003 Act is to define what are licensable activities and qualifying club activities and then to apply a statutory code to each of the main categories, that is to say, Part 3 deals with the premises licence; Part 4 deals with the club premises certificate; Part 5 deals with permitted temporary activity. These three categories are called ‘authorisations’ in the 2003 Act. Part 6 deals with the personal licence.

2.  Licensable activities 9.6 (1)

The 2003 Act sets out the four categories:14 the sale by retail of alcohol;

(2) the supply of alcohol by or on behalf of a club to, or to the order of, a member of the club; (3)

the provision of regulated entertainment;15

(4)

the provision of late night refreshment.

9.7 Temporary closure of clubs Clubs need to understand and take heed of restrictions during the coronavirus pandemic of 2020 concerning food and drink supplied or sold by them on their premises, which law came originally into force on 21 March 2020.16 Since then the legislation has much changed and clubs should ensure that they follow the current governmental guidance and legislation in conducting their activity.17

3.  Qualifying club activities 9.8 For the purposes of the above four categories the following are qualifying club activities:18 11 Licensing Act 2003, s 4(3). 12 Ibid, s 5. 13 Ibid, s  182. In licensing law nothing is writ in stone; the Policing and Crime Act 2017 introduced a raft of new measures to deal with problems arising from alcohol drinking. 14 Licensing Act 2003, s 1(1). 15 See 11.12. 16 Health Protection (Coronavirus, Business Closure) (England) Regulations 2020, SI 2020/327. This legislation expressly included clubs. These regulations were subsequently revoked. Those applicable in England as at 1 September 2020 are the Health Protection (Coronavirus, Restrictions) (No 2) (England) Regulations 2020, SI 2020/684 (as amended). 17 See, for example, the Coronavirus Act 2020 enacted on 25 March 2020 (s 87) and which contained 102 sections and 29 schedules. Under s  98 there has to be a parliamentary review of the situation within six months of that date, viz on or before 25 September 2020. Readers are advised to visit www.gov.uk/coronavirus to obtain up-to-date governmental information in relation to club activity. 18 Licensing Act 2003, s 1(2).

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9.9  Supply and Sale of Alcohol by the Club (1)

the sale by retail of alcohol by or on behalf of a club to a guest of a member of the club for consumption on the premises where the sale takes place (ie a variant of 9.6(1));

(2) the supply of alcohol by or on behalf of a club to, or to the order of, a member of the club (ie a repetition of 9.6(2)); (3) the provision of regulated entertainment where that provision is by or on behalf of a club for: (a) members of the club; or (b) members of the club and their guests (ie a variant of 9.6(3)).

4. Authorisations 9.9 As previously identified, authorisation is required for any licensable activity.19 An authorisation may be one of the following:20 (1)

a club premises certificate;

(2)

a premises licence;

(3)

a temporary event notice.

The 2003 Act expressly allows persons to hold two or more authorisations at the same time.21 For example, it is common to have a club premises certificate used in conjunction with temporary event notices, or occasionally a club premises certificate might be combined with a premises licence.

5.  Club premises certificate 9.10 A  club premises certificate will only be granted in respect of premises ‘occupied by, and habitually used for the purposes of, a club’.22 The certificate will last indefinitely23 unless it is granted for a limited period or is surrendered or withdrawn after review. There is no renewal procedure but an annual fee is payable to the licensing authority. The certificate will declare that the club premises may be used for the qualifying club activities set out in the certificate.24 This certificate has been specifically designed for members’ clubs25 and is likely to be the preferred option of the majority of clubs which wish to carry on the licensable activities set out in 9.8. Parliament has continued to treat members’ clubs favourably under the 2003 Act, but it is fair to add that the supervision and control of the club’s activities is undeniably stricter than under the 1964 Act. There is, too, a continuing

19 Licensing Act 2003, s  2. It is an offence to carry on a licensable activity otherwise than under and in accordance with an authorisation under s 2: ibid, s 136(1). 20 Ibid, s 2(4). 21 Ibid, s 2(3). 22 Ibid, s 60(1)(a). 23 See the Home Office guidance issued in October 2012. 24 Licensing Act 2003, s 1(2). 25 Ie excluding proprietary clubs.

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Club premises certificate 9.11 downward trend in the number of clubs holding a certificate to supply or sell alcohol to its members and guests, as may be seen from the following data:26 •

prior to November 2005: some 23,500 clubs held a registration certificate;

•

as at 31 March 2010: 16,707 such clubs existed, with over 300 clubs having surrendered their certificate during the course of the year;

•

as at 31 March 2018: 14,100 such clubs were reported to exist, a decrease of 200 (1%) from 2017.

According to the Evidence and Analysis Unit of the Department for Culture, Media and Sport in its bulletin of 29 September 2010 the peak of club certificates was reached in 1983, and the number of club certificates was then at its lowest since 1950.27 As may be seen, the numbers have continued to fall. 9.11 Qualifying club conditions To qualify for a club premises certificate a members’ club must satisfy certain conditions.28 There are five general conditions,29 and three additional conditions30 if a club intends to supply alcohol, which the club must satisfy in order to qualify for a club premises certificate: General: (1)

under the rules of the club a person may not be admitted to membership (or, as a candidate for membership be admitted to the privileges of membership) without an interval of at least two days between their nomination/application for membership and their admission as a member of the club;

(2) where the rules of the club permit persons to become members without prior nomination or application, those persons must not be admitted to the privileges of membership without an interval of at least two days between their becoming members and their admission to such privileges; (3)

the club is established and conducted in good faith as a club (see 9.12);

(4)

the club has at least 25 members;

(5) alcohol is not supplied, or intended to be supplied, to members on the premises except by or on behalf of the club. Additional: (6) insofar as the purchase of alcohol for the club, and its supply by the club, are not managed by the club in general meeting or by the general body of members, such purchase and supply are managed by an elected Committee of members aged 18 years and over,31 and clubs registered under either the Co-operative and Community Benefit Societies Act 2014 or the Friendly

26 Source: National Statistics Bulletin on Alcohol, Entertainment and Late Night Refreshment Licensing, England and Wales, 31  March 2018, published by the Home Office on 25 October 2018 (the latest bulletin). 27 See 9.37 for one explanation of the decrease in numbers. 28 Licensing Act 2003, ss 61 and 63. 29 Ibid, s 62. 30 Ibid, s 64. 31 It is unusual to let the general body of members have control of this aspect of the club’s affairs. See Licensing Act 2003, s 65.

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9.12  Supply and Sale of Alcohol by the Club Societies Acts 1974 or 1992 are deemed to satisfy this condition if the society Committee controls the purchase of alcohol and its supply to members; (7) no arrangements have been made, or are intended to be made, for any person to receive at the expense of the club any commission, percentage or similar payment in connection with the purchase of alcohol by the club; (8) no arrangements have been made, or are intended to be made, for any person directly or indirectly to derive pecuniary benefit from the supply of alcohol to club members and their guests except: (a) any benefit accruing to the club as a whole; (b) any benefit to a member deriving indirectly from profitable sales of alcohol at the club. 9.12 Test of good faith The matters to be taken into account in determining whether the club is established and conducted in good faith as a club are:32 (1)

any arrangements restricting the club’s freedom of purchase of alcohol;

(2)

any provision in the rules, or arrangements, under which money or property of the club, or any gain arising from the carrying on of the club, is or may be applied other than for the benefit of the club as a whole or for charitable, benevolent or political purposes;33

(3)

the arrangements for informing the membership about the club’s finances;

(4)

the state of the club’s books of account and records;

(5)

the nature of the premises occupied by the club.

If the licensing authority concludes that the club does not satisfy this test, it must give the club notice of the decision and the reasons for it.34 9.13 Advantages One commentator neatly summed up the situation: ‘The Government has been anxious to retain the unique character of clubs in general and to ensure that they keep their sometimes quirky nature, whilst at the same time bringing them into the new regime with sufficient regulation to ensure that their special nature is not abused’.35 Unlike other licensed premises, the holder of a club premises certificate enjoys the following advantages: (1) there is no requirement for a member or employee of the club to hold a personal licence; (2) consequently, there is no requirement to specify a designated premises supervisor in the certificate (which is a requirement for a premises licence);

32 Licensing Act 2003, s 63(2). 33 It is this provision which in particular ensures that the qualifying club must be a members’ club rather than a proprietary club. This provision can also cause problems if the members’ club is a company limited by shares which declares a dividend to its members. 34 Licensing Act 2003, s 63(3). 35 Barker and Cavender, Licensing –The New Law (2003) at 8.1.4. For an authoritative exposition of licensing law, see Paterson’s Licensing Acts 2021 (129th edn, by Jeremy Phillips QC et al).

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Club premises certificate 9.15 (3) the police and authorised officers have no right of entry into club premises without a court order;36 (4) there are no police powers of immediate closure of the club premises, and they are excluded from the court’s powers of closure of all licensed premises in a particular area.37 9.14 Application for certificate An application for a club premises certificate may be made by any qualifying club for ‘any premises which are occupied by and habitually used for the purposes of the club’.38 The application is made to the licensing authority in whose area the club premises are situated.39 The detailed procedure is governed by Parts  3 and 4 of the Licensing Act  2003 (Premises Licences and Club Premises Certificates) Regulations 2005.40 Regulation  17 and Part A of Sch 9 require the club to make the prescribed declaration as to its being a qualifying club. Regulation  18 and Part  B  of Sch  9 require the club to apply for a club premises certificate in the prescribed form and to pay the prescribed fee. Regulations 21A–21B permit the application to be made by electronic means. Regulations 25–26C prescribe the manner and timing of the advertisement of the application. Regulations 27, 27A and 28 prescribe the notice to be given to each responsible authority for the area in which the premises are situated, that is to say, the police, the fire authority, the environmental health authority and the planning authority.41 The application must be accompanied by:42 (1)

a plan of the premises;

(2)

a club operating schedule;

(3)

a copy of the rules of the club.

9.15 Plan of premises Consideration should be given to the proper extent of the licensed premises. Premises mean ‘any place’.43 It is important that the extent is 36 See 9.35. 37 See 9.47 and 9.61. 38 Licensing Act 2003, s 71(1). 39 Ibid, s  71(2). These regulations may be accessed via the government website, www. legislation.gov.uk. If the premises are situated in the areas of two or more licensing authorities the licensing authority is the one in whose area the greater or greatest part of premises is situated: ibid, s 68(3). 40 SI  2005/42, as augmented by the Licensing Act  2003 (Licensing Authority’s Register) (Other Information) Regulations 2005, SI 2005/43 and the Licensing Act 2003 (Hearings) Regulations 2005, SI 2005/44. In addition, the club should note the following regulations: the Licensing Act 2003 (Fees) Regulations 2005, SI 2005/79; the Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Miscellaneous Amendments) Regulations 2009, SI 2009/1809; the Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Amendment) (Electronic Applications) Regulations  2009, SI  2009/3159; Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010, SI 2010/860; Licensing Act 2003 (Premises Licences and Permitted Temporary Activities) (Forms and Notices) (Amendment) Regulations 2010, SI 2010/2851; Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Amendment) Regulations 2012, SI 2012/955; Licensing Act 2003 (Persistent Selling of Alcohol to Children) (Prescribed Form of Closure Notice) Regulations  2012, SI 2012/963; the Licensing Act 2003 (Forms) (Amendment) Regulations 2013, SI 2013/432; and the Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Amendment) Regulations 2018, SI 2018/232. See also the Licensing Act 2003 (Gambling and Licensing Forms) Regulations 2010, SI 2010/2440 which prescribe that Welsh and bilingual versions of the forms may be used when dealing with Welsh licensing authorities. 41 Licensing Act 2003, ss 69(4) and 71(6)(b) and SI 2005/42, reg 23. 42 Ibid, s 71(4). 43 Ibid, s 193. It also includes a vehicle, vessel or moveable structure.

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9.16  Supply and Sale of Alcohol by the Club not too narrow, say restricted to the clubhouse and its immediate environs such as its lawns, forecourt and terrace or balcony, when it is known that social occasions take place elsewhere, for instance, a cricket club which has a marquee on the edge of its cricket ground during a festival or a golf club which has a drinks tent on the ninth or tenth tee or mobile refreshment facilities during a competition. The application must be accompanied by a scaled plan which shows all of the following details clearly and legibly:44 (1)

the extent of the boundary of the building, if relevant, and any external and internal walls of the building and, if different, the perimeter of the premises;

(2)

the location of points of access to and egress from the premises;

(3)

if different from (2), the location of escape routes from the premises;

(4) in a case where the premises are to be used for more than one licensable activity, the area within the premises used for each activity; (5) fixed structures (including furniture) or similar objects temporarily in a fixed location (but not furniture) which may impact on the ability of individuals on the premises to use exits or escape routes without impediment; (6)

in a case where the premises include a stage or raised area, the location and height of each stage or area relative to the floor;

(7) in a case where the premises include any steps, stairs, elevators or lifts, the location of the steps, stairs, elevators or lifts; (8)

in the case where the premises include any room or rooms containing public conveniences, the location of the room or rooms;

(9) the location and type of any fire safety and any other safety equipment including, if applicable, marine safety equipment; and (10) the location of a kitchen, if any, on the premises. 9.16 Inspection of premises Where a club applies for a club premises certificate or applies for a variation of a certificate or an application is made for a review of the certificate, authorised persons or the police may inspect the club premises within 14 days after the making of the application, provided that 48 hours’ notice is given of the intended inspection.45 The authorised persons are defined in section 69(2) of the 2003 Act and comprise an officer of the licensing authority, an inspector from the fire authority, a health and safety inspector, an environmental health inspector, an inspector or surveyor of ships (if a vessel is involved) and any other prescribed person.46 The licensing authority can extend the 14-day period by up to seven days if the authorised person or the police constable had taken steps in good time to make the inspection but this had not proved possible within the time allowed.47 In other words, the onus is very much on the inspecting authority to arrange the inspection in good time.

44 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, SI 2005/42, reg 23. 45 Licensing Act 2003, s 96(1)-(4). 46 Ibid, s 69(2). 47 Ibid, s 96(7), (8).

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Club premises certificate 9.18 9.17 Club operating schedule This is a crucial document and must be in the prescribed form48 and include a statement of the following matters:49 (1)

the qualifying club activities to which the application relates;

(2)

the times during which it is proposed that the activities are to take place;

(3)

any other times during which it is proposed that the premises are to be open to members and their guests;

(4)

if applicable, whether the supply of alcohol is proposed to be for consumption on the premises, or for both on and off the premises;

(5)

the steps which it is proposed to take to promote the licensing objectives;

(6)

such other matters as may be prescribed by the Secretary of State.

The contents of this schedule demonstrate the bringing together of all licensable activities in one comprehensive certificate (as mentioned in 9.2(1)), that is to say, the supply and sale of alcohol and the provision of regulated entertainment. In preparing an operating schedule it will be helpful to consider both the statutory guidance issued by the Home Office under section 182 of the 2003 Act (most recently revised in April 2018), as well as any statement of policy issued by the relevant local authority and which must now by virtue of section 5(1) of the Act be updated every five years. 9.18 Hours of operation The times during which alcohol is to be supplied on club premises must be specified in the operating schedule and can be whatever hours are required by the club, subject to the overriding provisions of the licensing objectives and in particular any objections by the police based on the crime prevention objective. Before applying for a club premises certificate, clubs should therefore examine their activities and decide what hours are appropriate.50 There is no requirement that premises have to be actually open during all the hours set out in the operating schedule. In many cases it may be appropriate to set out in the operating schedule later closing hours on Fridays and Saturdays, say half past midnight, and earlier closing hours, say 10.30 pm, on other days. In determining this timetable, it is plain that clubs have to be conscious of staff working hours and balance their interests against the undoubted advantage of the flexibility conferred by the availability of longer drinking hours. Once they are incorporated into this schedule the times become, so to speak, ‘the permitted hours’. Managing committees need to be aware of the need to monitor the situation regarding opening hours, and members need to be conversant with opening hours, which should be published by notice in the clubhouse and/or set out in the bye-laws. If the bar steward is authorised to close the bar before the end of published opening hours, this fact should be made known to the members in order to avoid any

48 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, SI 2005/42, Sch 9, Part 2 of Part B as substituted by SI 2017/411. 49 Licensing Act 2003, s 71(5). 50 One in ten registered clubs in the 9,000 sample were recorded as trading to midnight as at November 2007 (prior to transition this figure had been one in fifty) and the average closing time for the sampled clubs was 23:56 hours, an increase of some 56 minutes over the previous average: see Evaluation of the Licensing Act  2003, App 3, published by the Department for Culture, Media and Sport, March 2008 (no update since then). Very few private clubs holding a club premises certificate have a 24-hour alcohol licence.

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9.19  Supply and Sale of Alcohol by the Club argument with members who insist that they can go on drinking right to the end of the published hours. 9.19 Representations One of the purposes of proper advertisement of the application is to enable a responsible authority or any other person to make representations to the licensing authority within 28 days after the application has been made to the licensing authority:51 9.20 Conditions on grant Conditions may be imposed on the certificate provided that they are consistent with the club operating schedule accompanying the application (which schedule itself has to comply with the licensing objectives),52 or where they are required in relation to off-sales53 or to the exhibition of films.54 The certificate can be granted with different conditions that apply to the various areas of the club premises, or to different qualifying club activities, giving the authority maximum flexibility.55 9.21 Mandatory conditions The 2003 Act was amended in 2009 to permit the Secretary of State to prescribe up to nine mandatory conditions to be attached to the club premises certificate relating to the supply of alcohol to members and guests in club premises in order to promote the four licensing objectives.56 These conditions are set out in the Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010 as amended.57 Five conditions are prescribed. They may be summarised as follows: (1) The ‘responsible person’ must take reasonable steps to ensure that staff on club premises do not carry out or arrange or participate in any ‘irresponsible promotions’; and to ensure that free potable water is provided on request to customers; and to ensure that an age verification policy is adopted whereby evidence of identity and age must be produced by anyone appearing to be under 18:58 (a) a responsible person means in relation to these mandatory conditions any member or officer of the club who is present in a capacity which enables him to prevent the supply of alcohol in question;59 (b) an irresponsible promotion means one of the following activities (or substantially similar activities) which are carried on for the purpose of encouraging the sale or supply of alcohol for consumption on the premises:60

51 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, SI  2005/42, reg  22, as amended by Licensing Act  2003 (Premises Licences and Club Premises Certificates) (Amendment) Regulations 2012, SI 2012/955, reg.4. 52 Licensing Act 2003, s 72(2). 53 Ibid, s 73. See further 9.32. 54 Ibid, s  74. The admission of children (ie  those under 18) is subject to restrictions recommended by the licensing authority. 55 Ibid, s 72(10). 56 Ibid, ss 73A and 73B, inserted by Policing and Crime Act 2009, Sch 4, paras 3 and 4. 57 SI  2010/860 as amended by the Licensing Act 2003 (Mandatory Licensing Conditions) (Amendment) Order 2014, SI 2014/2440. 58 Licensing Act  2003 (Mandatory Licensing Conditions) Order  2010, Sch, para  1(1), as amended by SI 2014/2440, Sch 1, paras 1, 2 and 3. 59 Licensing Act 2003, s 153(4)(b). 60 Licensing Act  2003 (Mandatory Licensing Conditions) Order  2010, as amended by SI 2014/2440, Sch, para 1(2).

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Club premises certificate 9.21 (i)

games which require or encourage drinking a quantity of alcohol within a time limit;

(ii) games which require or encourage drinking as much alcohol as possible (whether or not within a time limit); (iii) provision of unlimited or unspecified quantities of alcohol either free or for a fixed or discounted fee to the public or to a group identified by a defined characteristic in a manner which carries a significant risk of undermining a licensing objective, for example, students at Basset University on a guided pub crawl; (iv) provision of free or discounted alcohol or any other thing as a prize to encourage or reward the purchase and consumption of alcohol over a period of 24 hours in a manner which carries a significant risk of undermining a licensing objective; (v)

provision of free or discounted alcohol in relation to viewing on club premises of a sporting event where the provision is dependent on the outcome of the event or on the likelihood of something occurring or not occurring;

(vi) selling or supplying alcohol in association with promotional posters or flyers on, or in the vicinity of, club premises which can reasonably be said to condone, encourage or glamorise anti-social behaviour or to refer to the effects of drunkenness in a favourable manner; (2) the responsible person shall ensure that no alcohol is dispensed directly by one person into the mouth of another (other than where that other person is unable to drink without assistance by reason of a disability);61 (3)

the responsible person shall ensure that free tap water is provided on request to members and guests where it is reasonably available;62

(4) the club shall ensure that an age verification policy applies to alcohol sold and supplied on the club premises. The policy must require members or guests who appear to the responsible person to be under the age of 18 (or such older age as may be specified in the policy) to produce on request, before being served with alcohol, identification bearing their photograph, date of birth and a holographic mark, such as is used on bank credit cards;63 (5) the responsible person shall ensure that the following alcoholic drinks are sold or supplied for consumption on the club premises in the listed measures, which must be displayed in a printed price list made available to customers: (a) beer or cider: 1/2 pint; (b) gin, rum, vodka or whisky: 25 ml or 35 ml; (c) still wine in a glass: 125 ml.

61 Licensing Act  2003 (Mandatory Licensing Conditions) Order  2010, as amended by SI 2014/2440, Sch, para 1(2)(e). 62 Ibid, Sch, para 2. The definition of disability may be seen in the Equality Act 2010, s 6 (see 5.78). 63 Ibid, Sch, para 3.

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9.22  Supply and Sale of Alcohol by the Club An exception applies where the alcoholic drinks are made up in advance ready for sale or supply in a securely closed container. The responsible person must ensure the members and guests are made aware of the measures used unless they order a specified quantity of alcohol.64 9.22 Early morning alcohol restriction order The Licensing Act 2003 was amended in 2012 to add sections 172A–172E.65 If considered appropriate for the promotion of the licensing objectives, the licensing authority has the power to make an early morning alcohol restriction order stipulating that: (a) a club premises certificate or a premises licence granted by the authority or a temporary event notice given to the authority shall not have effect to the extent that they authorise the sale of alcohol during a period specified in the order beginning no earlier than midnight and ending no later than 6 am; and (b) that a club premises certificate granted by the authority shall not have effect to the extent that it authorises the supply of alcohol by or on behalf of the club to, or to the order of, a member of the club for a specified period between midnight and 6 am.66 The authority must advertise a proposed restriction order67 and must hold a hearing to consider any representations.68 The authority must publish any order which it makes69 and may vary or revoke it.70 For a variety of reasons, no such orders have been made to date. 9.23 Form of certificate The club premises certificate shall be in the prescribed form71 and must include:72 (1)

the name and registered address of the club;

(2)

the address to which the certificate relates;

(3)

a plan of the premises;

(4)

the qualifying club activities for which the premises may be used;

(5)

any conditions to which the certificate is subject.

A summary of the certificate must also be issued in the prescribed form.73 9.24 Duty to keep and produce certificate and display summary74 If the certificate authorises a qualifying club activity then the club secretary must ensure that the certificate (or a properly certified copy) is kept at the premises

64 Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010, Sch, para  4. Local authorities commonly impose as a condition the adoption of the ‘Challenge 21 Scheme’ whereby persons who appear to be under the age of 21 are required to provide verification of their age in order to prevent under-age drinking, that is, the sale or supply of alcohol to persons under 18: see Licensing Act 2003, s 146–147B on the offences about selling alcohol to children. 65 Police Reform and Social Responsibility Act 2011, s 119. 66 Licensing Act 2003, s 172A. 67 Ibid, s 172B(1). 68 Ibid, s 172B(2). 69 Ibid, s 172C. 70 Ibid, s 172D. 71 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, reg 35 and Sch 13, Part A. 72 Licensing Act 2003, s 78(2). 73 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, reg 36 and Sch 13, Part B. 74 Licensing Act 2003, s 94.

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Club premises certificate 9.27 to which it relates and that a nominated person is responsible for it. That person must be: (1)

the secretary, or

(2)

any member of the club, or

(3)

any person who works at the premises for the purposes of the club.

The licensing authority must be notified of the identity of the nominated person. The secretary commits an offence if he fails to do so without reasonable excuse.75 The nominated person must ensure that the summary of the certificate, or a certified copy of the summary, is prominently displayed at the premises, together with a notice specifying the position which the nominated person holds at the club. He commits an offence if he fails to do so without reasonable excuse.76 9.25 Loss of certificate or summary  Where the certificate or summary is lost, stolen, damaged or destroyed, the local authority must provide a certified copy, upon payment of a prescribed fee, if it is satisfied that the certificate or summary has thus become unavailable and that, if lost or stolen, the matter has been reported to the police.77 9.26 Change of name or address or rules of the club Where a club holds a club premises certificate, or has made an application for such a certificate which has not yet been determined, the club secretary must inform the licensing authority within 28 days of any change of name of the club or any alteration of its rules.78 If the club holds such a certificate and ceases to use the registered address, it must inform the licensing authority as soon as reasonably practicable.79 9.27 Variation of certificate  It is open to a club to apply for a variation of the club premises certificate at any time.80 The variation process is governed by regulation 20 of and Schedule 8 to the Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations  2005 and shall be accompanied by the prescribed fee. The variation process has been made less costly and less timeconsuming in relation to ‘minor variations’ which are those that do not affect promotion of the licensing objectives.81 What is or is not considered to be a minor variation is to some degree a matter of interpretation and consequently this depends on the local authority concerned. The application must be advertised and notified to various authorities.82 The club will also be open to inspection by the police, fire authority or environmental health department.83 The club must send to the licensing authority its club premises certificate, or an explanation of

75 76 77 78 79 80 81

Licensing Act 2003, s 94(5). Ibid, s 94(6). Ibid, s 79 as amended by the Deregulation Act 2015, s 72(b). Ibid, s 82. Ibid, s 83. Ibid, s 84(1). Ibid, ss  86A, 86B and 86C, inserted by Legislative Reform (Minor Variations to Premises Licences and Club Premises Certificates) Order  2009, SI  2009/1772; and see Licensing Act 2003 (Premises Licences and Club Premises Certificates) (Miscellaneous Amendments) Order 2009, SI 2009/1809, prescribing amended forms, advertising requirements and fees relating to minor variations. 82 Licensing Act 2003, s 84(2) and (4). 83 Ibid, ss 71(6) and 96.

197

9.28  Supply and Sale of Alcohol by the Club why the certificate is not available.84 If the licensing authority receives any relevant representations85 a hearing must be held, unless all parties agree that this is not necessary.86 If no relevant representation is received, the licensing authority must grant the variation sought,87 and issue an amended certificate together with, if necessary, a new summary.88 If relevant representations have been received and considered, the licensing authority may either modify the conditions of the certificate or reject the whole or part of the application.89 The guiding principle, as elsewhere in the 2003 Act, is the promotion of the four licensing objectives set out in 9.4.90 9.28 Duration of the certificate A  club premises certificate will remain in force until or unless one of the following situations occurs in relation to the certificate: (1)

it is granted for a limited period because the club makes this request in its application form;

(2)

it is suspended due to non-payment of the annual fee;91

(3)

it is withdrawn by the licensing authority following an application for review of the certificate;92

(4)

it is voluntarily surrendered;93

(5)

the club ceases to be a qualifying club.94

9.29 Review of certificate A responsible authority, or any other person may apply at any time to a licensing authority for a review of the certificate.95 The review will be based on the licensing objectives. If the local authority is both the licensing authority and a responsible authority it may, in its capacity as responsible authority, apply for a review and then determine the application in its capacity as licensing authority.96 This is an interesting statutory avoidance of the first rule of natural justice which states that no person shall be a judge in his own cause, and gives rise to a situation which might provoke an application for judicial review if the application is not dealt with in a scrupulously fair manner by the licensing authority (eg  by strict separation internally of the functions of any licensing officer bringing the review from the person responsible for administering the business of any subcommittee hearing). The review process is governed by regulations 20 and 29 of and Schedule 8 to the Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005. The licensing authority may at any time reject the application if it is satisfied that the ground for the application for review is not

84 Licensing Act 2003, s 84(3). 85 As to relevant representation, see 9.19. 86 Licensing Act 2003, s 85(3)(a). 87 Ibid, s 85(2). 88 Ibid, s 93(1). 89 Ibid, s 85(3), (4). 90 Ibid, s 85(3)(b). 91 Ibid, s 92A, inserted by the Police Reform and Social Responsibility Act 2011, s 120. 92 See 9.29. 93 See 9.30. 94 See 9.11. 95 Licensing Act 2003, s 87(1), as substituted by the Police Reform and Social Responsibility Act 2011, s 108(2). For the definition of a responsible authority, see 9.2(9). 96 Licensing Act 2003, s 89. A similar situation did obtain under the Licensing Act 1964 in relation to the renewal of justices’ licences.

198

Club premises certificate 9.32 relevant to the licensing objectives; or if made by a party other than a responsible authority it is frivolous or vexatious; or it is a repetition of a ground unsuccessfully relied on in an earlier application and a reasonable time interval has not elapsed since the earlier occasion.97 If the application for review is rejected the applicant must be informed on which ground the rejection has been based and, where the ground was that the application was frivolous or vexatious, the licensing authority must give reasons for its decision.98 If, however, the application is not rejected by the licensing authority under section 87(4) of the Licensing Act 2003 it must hold a hearing to consider the application and any relevant representations,99 whereupon it may take such steps as it considers appropriate to promote the licensing objectives.100 The steps are:101 (1)

to modify the conditions of the certificate;

(2)

to exclude a qualifying club activity from the scope of the certificate;

(3)

to suspend the certificate for a period not exceeding three months;102

(4)

to withdraw the certificate.

9.30 Surrender Where the club decides to surrender its club premises certificate it may give the licensing authority notice to that effect.103 The notice must be accompanied by the certificate or, if not practicable, must be accompanied by a statement giving reasons for failure to produce it,104 and the certificate lapses on receipt of the notice by the licensing authority.105 9.31 Withdrawal Where it appears to the licensing authority that a club in possession of a club premises certificate no longer satisfies the conditions for being a qualifying club in relation to a qualifying activity the authority must give notice to the club withdrawing the certificate insofar as it relates to that activity.106 If the only condition not satisfied is that relating to the required minimum number of 25 members, the notice withdrawing the certificate must state that the withdrawal does not take effect until immediately after a period of three months following the date of the notice, and that it will not take effect if at the end of that period the club again has at least the required number of members.107 9.32 Off sales A  club premises certificate may not authorise the supply of alcohol for consumption off the club premises unless it also authorises the supply of alcohol to members for consumption on the premises.108 There are four mandatory conditions which will appear on the certificate:109 (1)

the off-supply must be made at a time when the club is open for on-supply;

97 Licensing Act 2003, s 87(4), (5). 98 Ibid, s 87(6). 99 Ibid, s 88(2). As to ‘relevant representations’, see 9.19. 100 Ibid, s 88(3). 101 Ibid, s 88(4). 102 During which time the certificate has no effect: ibid, s 80(2). 103 Ibid, s 81(1). 104 Ibid, s 81(2). 105 Ibid, s 81(3). 106 Ibid, s 90(1). 107 Ibid, s 90(2). 108 Ibid, s 73(1). 109 Ibid, s 73(2)–(5).

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9.33  Supply and Sale of Alcohol by the Club (2)

the off-supply must be in a sealed container;

(3) the off-supply must be made to a club member in person; it may not be made to a member’s guest; (4) the club shall ensure that an age verification policy applies to alcohol supplied off the club premises. The policy must require members who appear to the responsible person to be under the age of 18 (or such older age as may be specified in the policy) to produce on request, before being served with alcohol, identification bearing their photograph, date of birth and a holographic mark.110 9.33 Guests and visitors The sale of alcohol to members’ guests for consumption on the premises where the sale takes place is a licensable activity which is authorised by a club premises certificate.111 Thus the guest may purchase an alcoholic drink not only for himself but for the member as well. The 2003 Act does not define what constitutes a guest but in order to protect the bona fides of the club it is plain that the person must be a genuine guest and this will be a question of fact in each case. The position of guests is to be contrasted with that of mere visitors to the club. The latter are treated under the 2003 Act simply as members of the public, and they cannot themselves purchase or consume alcoholic drinks whilst on club premises (whatever it might say in the rules) unless the club holds a premises licence (see 9.37) or a sale to the visitor is covered by a temporary event notice (see 9.50).112 Unlike the Licensing Act 1964, the admission of guests or visitors into a club under the 2003 Act is not dependent on the rules permitting this but nevertheless it is important that the rules regularise the admission of such persons into the club premises and, in particular, give the committee the power to exclude any guest or visitor in its absolute discretion. 9.34 Associate members Under section 67 of the 2003 Act any reference to a guest of a member includes a reference to an associate member of the club, and it also includes a guest of that associate member.113 For the purposes of the 2003 Act a person is an ‘associate member’ if: (a) in accordance with the rules of the host club he is admitted into the club premises as being a member of another club; and (b) that other club is a ‘recognised club’.114 A  recognised club is defined in section 193 as being a club which satisfies conditions (1), (2) and (3) of the general conditions in section 62.115 Here it is essential that the rules deal with the admission of associate members because without an appropriate rule the associate member will not be able to attend the host club and purchase or consume an alcoholic drink on the club premises. Under this regime it is common for clubs to have collective

110 This condition was added by Licensing Act  2003 (Mandatory Licensing Conditions) Order  2010 as amended by Licensing Act 2003 (Mandatory Licensing Conditions) (Amendment) Order 2014, SI 2014/2440, article 3(2)–(3) and Sch, para 3. For ‘responsible person’ see 9.21(1)(a). 111 Licensing Act 2003, s 1(2)(b). 112 The Licensing Act  1964 contained an important relaxation, now abolished. Under s  49 visitors could be admitted into the club premises and purchase alcoholic drinks for consumption on the club premises provided the club rules made provision for this and provided the club complied with certain restrictive conditions, such as notification to the chief officer of police. This admission of visitors could be done on a regular or frequent basis, thus providing the club with extra income. 113 Licensing Act 2003, s 67(1). 114 Ibid, s 67(2). 115 See 9.11.

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Premises licence 9.37 reciprocal arrangements with other recognised clubs whereby the members of one club may be admitted as associate members into the other club. 9.35 (1)

Police entry into club premises  Where a justice of the peace is satisfied that there are reasonable grounds for believing that the club does not satisfy the conditions for being a qualified club in relation to any qualifying activity and that evidence to that effect may be obtained at the club’s premises, he may issue a warrant authorising a constable to enter the premises, if necessary by force, in order to search them for that purpose.116 The search must be made within one  month of the date of the warrant, and a person entering under the authority of a warrant may seize and remove any documents relating to the business of the club.117 On the other hand, there is no right of entry by the police or by an authorised person118 to enter club premises to see whether any licensable activity is being carried on in accordance with an authorisation, provided that the premises in question are covered by a club premises certificate and by no other authorisation.119

(2) Where a police constable has reasonable cause to believe that offences concerning the supply of controlled drugs or psycho-active substances are, have been or are about to be committed on club premises, or that there is likely to be a breach of the peace there, he or she has power, without obtaining a search warrant, to enter and search the club premises, using reasonable force if necessary.120 9.36 Statutory inclusion under the Licensing Act 2003 It should be noted that co-operative societies and community benefit societies,121 working men’s clubs registered under the Friendly Societies Act and miners’ welfare institutes122 merit a special mention in the Licensing Act 2003 to ensure that they qualify as clubs within the legislation.123 They must, however, meet the statutory requirements concerning their constitution and management.

6.  Premises licence 9.37 One of the persons who may apply for a premises licence is a recognised club.124 As mentioned in footnote 112 to 9.33, the relaxation contained in section 49 of the Licensing Act 1964 no longer exists. Generally speaking, if the club wishes to admit, or to continue to admit visitors, that is, members of the public, 116 Licensing Act 2003, s 90(5). 117 Ibid, s 90(5) and (6). 118 Ie an officer of the licensing authority, an inspector appointed by the fire and rescue authority or a health and safety inspector: ibid, s 69(2) as amended by Police Reform and Social Responsibility Act 2011, s  107 and the Health and Social Care Act 2012, Sch  5, para 115(a). 119 Licensing Act 2003, s 179(7). 120 Ibid, s 97 as amended. 121 Registered under the Co-operative and Community Benefit Societies Act 2014: see 1.17– 1.18 and 1.20. 122 At to the status of miners’ welfare institutes, see footnote 4 to 12.2. 123 Licensing Act 2003, ss 65 and 66. 124 Ibid, s 16(1)(c). A recognised club is defined in s 193 as meaning a club which satisfies conditions (1), (2) and (3) of the general conditions set out in s 62: see 9.11.

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9.38  Supply and Sale of Alcohol by the Club and to sell or supply alcoholic drinks to them, it has one of two options: either it will have to surrender its club premises certificate and apply for a premises licence, or it will have to rely on the permitted allowance of 15 temporary event notices per year (see 9.53). The premises licence will cover all the licensable activities set out in (1)–(4) in 9.6,125 and will thus include the sale of alcohol and/or the provision of regulated entertainment to visitors. However, there is no doubt that the premises licence is subject to a stricter and, by and large, a more costly system of regulation than operates under the club premises certificate; and it also requires a designated individual to be the holder of a personal licence (see 9.62). On the other hand, providing the club premises are suitable, there is a growing trend amongst members’ clubs to consider the premises licence rather than the club premises certificate. The club premises certificate was created as the direct descendant of the club registration certificate but in some ways it lacks flexibility, especially with the loss of the facility created by section  49 of the 1964 Act. Club premises are often under-used during the weekdays and a premises licence creates a better opportunity for the club to diversify its activities on a regular or organised basis, such as the holding of dinners for outside societies, or the holding of a local bridge tournament, or the providing of the venue for meetings of outside organisations where alcoholic and other refreshments can be served after the meeting, and these activities in turn generate welcome income for the club. Lastly, combining a premises licence with a club premises certificate is occasionally feasible and can be advantageous. The authors know of a members’ sports club built in 1928 which contains a ballroom with its own bar and catering facilities as part of its complex. The club has created separate access to the ballroom and obtained a premises licence restricted to this part of the club, so that it can generate additional income for the club by being hired out for outside functions on a regular basis, whereas the remainder of these club premises is covered by a club premises certificate. 9.38 Application for licence The application may be made to the relevant licensing authority in respect of one or more licensable activities. The detailed procedure is governed by Parts 2–4 of the Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005.126 Regulation 9 and Schedule 1 require details of the freeholder or leaseholder of the premises in question. Regulation 10 and Schedule 2 require the club to apply for a premises licence in the prescribed form and to pay the prescribed fee. Regulations 21–21B permit the application to be made by electronic means. Regulations 25 and 26 prescribe the manner and timing of the advertisement of the application (as to representations see 9.40). Regulations 27, 27A and 28 prescribe the notice to be given to each responsible authority for the area in which the premises are situated, that is to say: (a) the police, (b) the fire authority, (c) the Local Health Board, (d) the local authority with public health functions, (e) the enforcing authority under the Health and Safety at Work etc Act 1974, (f) the environmental health authority, (g) the planning authority and (h) the body interested in matters relating to the protection of children from harm. In practice, the licensing authority’s website will invariably provide the names and addresses of the parties to which notice shall be given. The application must be accompanied by:127 (1)

a plan of the premises (see 9.15);

125 Licensing Act 2003, s 16(1)(c). 126 As amended and augmented by the regulations referred to in footnote 40. These regulations may be accessed in full via the government website, www.legislation.gov.uk. 127 Licensing Act 2003, s 17(3).

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Premises licence 9.41 (2)

an operating schedule (see 9.17);

(3)

if the licensable activities include the supply of alcohol, a form of consent (in the prescribed form) given by the individual whom the applicant wishes to have specified as the premises supervisor.

9.39 Operating schedule This is a crucial document and must be in the prescribed form128 and include a statement of the following matters:129 (1)

the licensable activities to which the application relates;

(2)

the times during which it is proposed that these activities are to take place;

(3)

any other times during which it is proposed that the premises are to be open to the public;

(4)

where the applicant wishes the licence to have effect for a limited period, that period;

(5)

where the activities include the supply of alcohol: (a) the prescribed information in respect of the individual whom the applicant wishes to have specified in the licence as the premises supervisor; (b) whether the supply is proposed to be for the consumption on the premises or off the premises or both;

(6)

the steps which it is proposed to take to promote the licensing objectives;

(7)

such other matters as may be prescribed.

9.40 Representations One of the purposes of proper advertisement of the application is to enable a responsible authority or any other person to make representations to the licensing authority within 28 days after the application has been made to the licensing authority.130 9.41 Designated premises supervisor This is the individual person specified in the licence as the premises supervisor. He must hold a personal licence.131 Supervision does not mean that the supervisor has to be present whenever alcohol is sold.132 There are provisions to cater for the change in the identity of the supervisor.133 A  holder of a personal licence, who is the applicant for a premises

128 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, Sch 2. 129 Licensing Act 2003, s 17(4). See R (on the application of the British Beer and Pub Association) v Canterbury City Council [2005] EWHC 1318 (Admin), [2006] BLGR 596 for a consideration of the role of the authority’s statement of policy in this regard. 130 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, SI  2005/42, reg  22, as amended by Licensing Act  2003 (Premises Licences and Club Premises Certificates) (Amendment) Regulations 2012, SI 2012/955, reg 4. 131 Licensing Act 2003, s 19(3). See 9.62. 132 See Kolvin, Licensed Premises: Law, Practice and Policy, 2nd edn (Bloomsbury Professional, 2013) at para 15.23(5) and Home Office, Revised Guidance issued under section 182 of the Licensing Act 2003 (April 2018) para 10.28. 133 An application to vary the supervisor may include a request that the variation of supervisor may take immediate effect because, eg she has died; in this event the variation will take effect when the application is received by the licensing authority: Licensing Act 2003, ss 37 and 38. This replaces the old protection order which has been abolished.

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9.42  Supply and Sale of Alcohol by the Club licence, does not have to be the designated supervisor of the club premises to which the premises licence relates but he may be so.134 9.42 Mandatory conditions The 2003 Act, as enacted, imposed two mandatory conditions on the premises licence where it relates to the supply of alcohol:135 (1) no supply of alcohol may be made when there is no designated premises supervisor in respect of the premises licence, or at a time when the designated premises supervisor does not hold a personal licence or his personal licence has been suspended; and (2)

every supply of alcohol must be made or authorised by a person who holds a personal licence.

9.43 The 2003 Act was amended in 2009 to permit the Secretary of State to prescribe up to nine mandatory conditions to be attached to the premises licence relating to the supply of alcohol to members, guests and visitors on licensed premises in order to promote the four licensing objectives.136 These conditions were set out in the Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010 and came into effect (as amended) on 1  October 2014.137 Five conditions are prescribed, which are detailed in 9.21. A responsible person means in this context the holder of the premises licence or the designated premises supervisor (if any) or someone who is over the age of 18 who has been duly authorised by the premises licence holder or the supervisor to act as the responsible person. Taking into account the above two, there are seven mandatory conditions as regards the on-supply of alcohol. As regards off-sales, the only mandatory condition, in addition to the original two, which applies to a premises licence is the age verification policy.138 9.44 Early morning alcohol restriction order This order applies to premises licences: see 9.22. 9.45 Form of licence The premises licence shall be in the prescribed form139 and must include:140 (1)

the name and address of the holder of the personal licence;

(2)

a plan of the licensed premises;

(3)

if the licence is for a limited period, that period;

(4)

the licensable activities for which the premises may be used;

(5)

if the licensable activities include the supply of alcohol, the name and address of the individual (if any) who is the premises supervisor;

(6)

the conditions subject to which the licence has effect.

134 Licensing Act 2003, s 15(2). 135 Ibid, s 19. 136 Ibid, s 19A, inserted by Policing and Crime Act 2009, Sch 4, para 2. 137 SI  2010/860, as amended in 2014 by the Licensing Act 2003 (Mandatory Licensing Conditions) (Amendment) Order 2014, SI 2014/2440. 138 Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010, article 3 and Sch. 139 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, reg 33 and Sch 12, Part A. 140 Licensing Act 2003, s 24(1).

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Premises licence 9.49 A summary of the certificate must also be issued in the prescribed form.141 9.46 Variation of licence The variation process is governed by regulation 12 of and Schedule 4 to the Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005 and shall be accompanied by the prescribed fee. The variation process has been made less costly and less time-consuming in relation to minor variations which do not affect promotion of the licensing objectives.142 Where an application is made by a licence holder to vary the premises licence and the requirements as to advertisement, etc, of the application have been complied with, and in the absence of any relevant representations, the licensing authority must grant the application.143 Application may also be made to vary the licence in order to specify a different individual as the premises supervisor.144 Here the variation process is governed by regulation  13 of and Schedule  5 to the 2005 Regulations. If the variation is solely to include the alternative licensing provision, regulation 13A and Schedule 4A apply to further relax the requirements.145 9.47 Review of licence A  very similar set of provisions applies to the review of a premises licence as applies to a club premises certificate, save that the persons who can make an application for review include both ‘any person’ and a responsible authority.146 This review process is governed by regulations 20 and 29 of and Schedule 8 to the Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005. To this standard review has been added a new summary review under the Licensing Act 2003 (Summary Review of Premises Licences) Regulations  2007 which relates to serious crime and disorder. This summary process is initiated by the police and is governed by regulations 16A, 36A and 39A of and Schedule 8A to the said 2005 Regulations. 9.48 Duration of licence A  premises licence has effect until the expiry of any period to which the licence was expressed to be limited,147 or it is revoked148 (following an application for review) or, in the case of a club, it ceases to be a recognised club,149 or its certificate is surrendered.150 9.49 Police entry into and closure of licensed premises Where a constable or authorised officer151 has reason to believe that any premises are being, or are about to be, used for a licensable activity, he or she may enter with a view to seeing whether the activity is being, or is to be, carried out in accordance with and under

141 Licensing Act 2003 (Premises Licences and Club Premises Certificates) Regulations 2005, reg 34 and Sch 12, Part B. 142 Legislative Reform (Minor Variations to Premises Licences and Club Premises Certificates) Order  2009 and Licensing Act  2003 (Premises Licences and Club Premises Certificates) (Miscellaneous Amendments) Order 2009. 143 Licensing Act 2003, ss 34 and 35. 144 Ibid, s 37. 145 See Licensing Act 2003 (Miscellaneous Amendments) Regulations 2017, SI 2017/411. 146 See 9.2(9). Here the relevant sections are Licensing Act 2003, ss 13, 51–53 as amended by the Police Reform and Social Responsibility Act 2011, s 106. 147 Licensing Act 2003, s 26. 148 Ibid, s 52. 149 Ibid, s 27(1)(e). A recognised club is defined in s 193 as meaning a club which satisfies conditions (1)–(3) of the five general conditions set out in s 62: see 9.11. 150 Ibid, s 28. 151 Defined as an officer of the licensing authority, an inspector appointed by the fire and rescue authority and a health and safety inspector: see ibid, s 179(6).

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9.50  Supply and Sale of Alcohol by the Club an authorisation.152 Such person may use reasonable force to obtain entry.153 Where there is or expected to be disorder in a local area, the magistrates’ court has power to close for 24 hours all premises in respect of which a premises licence has effect on the application of a police officer of the rank of superintendent or above.154 In addition, a police officer of the rank of inspector or above may make, for 24 hours, a closure notice of identified premises if the use of the premises has resulted or will, in the absence of the order, result in nuisance to the public or disorder nearby and the notice is necessary to prevent the nuisance or disorder from occurring or continuing. The notice can prohibit specified people from accessing the premises at specified times and in specified circumstances. The notice must be fixed to the premises and served on someone appearing to have control of or responsibility for the premises. An officer of at least the rank of superintendent may make an order which lasts for 48 hours and local authorities have the same powers.155

7.  Temporary event notice 9.50 The temporary event notice (‘TEN’) is the third type of authorisation for licensable activities provided for under the 2003 Act.156 The application may only be made by an individual, not by a club. The essence of this authorisation is that no actual permission is required for an individual over the age of 18 (‘the premises user’) to carry on one or more licensable activities on a temporary basis, that is to say, an event lasting up to 168 hours involving no more than 499 people.157 The authorisation is subject to various conditions158 and there are limits as to the number of temporary events which may be permitted.159 Different limits apply depending on whether or not the premises user holds a personal licence and whether the TEN is a ‘standard’ or ‘late’ application.160 By its nature an authorised temporary event arranged by a club is not confined to the club members. Although the premises in question would usually be the club premises, a TEN can cover any premises, that is to say, it may take place elsewhere either indoors or outdoors, or in a marquee or in a garden.161 It may be noted in passing that for the year ended 31 March 2018 some 142,878 TENs were used in England and Wales; some 2,034 notices were withdrawn; some 781 notices were modified with police consent; and some 822 counter notices were given by the licensing authority following police objection.162 These figures show the continuing popularity and effectiveness of this type of authorisation. 9.51 Functions organised by the club As an example of an application for a TEN, a club holds a club premises certificate and the secretary is approached by a non-member as to the possibility of holding a party for his family and friends on the

152 Licensing Act 2003, s 179(1). 153 Ibid, s 179(3). 154 Ibid, s 160(1)(b) and (2). 155 Anti-social Behaviour, Crime and Policing Act 2014, ss 76–79. 156 Licensing Act 2003, s 2(4)(c). 157 Ibid, s 100(1)-(5) as amended by the Police and Social Responsibility Act 2011, ss 114–115. 158 Ibid, s 98. 159 Ibid, s 107(4). 160 Ibid, s 107(2)(b), as amended; and see 9.52. 161 Ibid, s 100(1). 162 Source: Home Office, Alcohol and Late Night Refreshment Licensing, England and Wales, 25 October 2018, Table 17.

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Temporary event notice 9.53 club premises, with bar facilities and a band, to celebrate his son’s 18th birthday. The club is agreeable to this arrangement (say, for sound financial reasons) so a club individual must give the necessary notice to the licensing authority as the premises user.163 A word of caution should be given here. Part 3 of Equality Act 2010 would apply to this situation. This part deals with services and public functions. In letting out its premises to members of the public the club will be a ‘service-provider’ and as such must not discriminate against164 or harass165 or victimise166 a member of the public by not providing the required service or, for example, subjecting that person to some detriment.167 Thus the club steward could not eject from the premises a breast-feeding mother who was a birthday party guest (this would be sex discrimination) nor could he ban a homosexual birthday party guest from using the gentlemen’s lavatory (this would be sexual orientation discrimination). 9.52 Two-tier system The Police Reform and Social Responsibility Act 2011 introduced a two-tier system, namely, the standard TEN and the late TEN: (1)

the standard TEN: If the application is submitted to the licensing authority at least 10 clear working days before the start of the event this will be considered a standard TEN;168

(2)

the late TEN: this notice must be given to the licensing authority no later than five clear working days but no earlier than nine clear working days before the day on which the event begins.169

Clear working days do not include the day the authority receives the application or the day of the event.170 9.53 (1)

Limit on the number of TEN notices Generally: no premises may be used more than 15 times in any one calendar year for a late TEN, with an overall maximum of 21 days in any one year on which temporary events may take place at any particular premises.171

(2) An important point to remember is that if the event period straddles two calendar years the restrictions apply separately in relation to those two years, that is to say, the event is counted twice, once in the first year and once in the second year.172 (3)

Club premises certificate: where a club holds a club premises certificate (and therefore no member or employee will hold a personal licence), a premises user may give up to five standard TENs or two late TENs within the same year as the event specified in the notice.173 Consequently three members of a club in possession of a club premises certificate could give the maximum

163 Licensing Act 2003, s 100(2). 164 See 4.23. 165 See 4.24. 166 See 4.25. 167 Equality Act 2010, s 29. 168 Licensing Act 2003, s 100A(1)(a) and (2). 169 Ibid, s 100A(1)(b) and (3). 170 Ibid, s 193(1) as renumbered and inserted by Immigration Act 2016, Sch 4, para 30. 171 Licensing Act 2003, s 107(4) and (5), as amended by the Deregulation Act 2015, s 68(1). ‘Year’ means calendar year: s 107(13)(b). 172 Ibid, s 107(6). 173 Ibid, s  107(3)(b), as inserted by the Police Reform and Social Responsibility Act 2011, s 114(10)(a).

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9.54  Supply and Sale of Alcohol by the Club of 15 standard TENs where the temporary events are to take place on club premises. There must, however, be at least 24 hours’ interval between event periods in respect of the same premises, where the notices are given by the same premises user, or by an individual who is an associate of the premises user.174 ‘Associate’ here means:175 (a) the spouse or civil partner of the individual giving the notice; (b) a child, parent, grandchild, grandparent, brother or sister of that individual; (c) an agent or employee of that individual; (d) the spouse or civil partner of a person within category (b) or (c); (e) living together as man and wife; (f) in business together where that business relates to one or more licensable activities. The Secretary of State may by order substitute different limits on the number of notices.176 (4)

Premises licence: a personal licence holder is allowed up to 10 late TENs but up to 50 standard TENs (less one for each late TEN) in any calendar year and other premises users [ie  non-personal licence holders] are allowed up to two late TENs and up to five standard TENs (less one for each late TEN) in a calendar year.177 In each case, the total number of TENs of either kind is limited to 15 occasions per calendar year. An addition to this flexibility can be achieved if the club’s application for a premises licence includes in its operating schedule the ability to hold up to 12 events per calendar year (precise dates to be notified in advance to the licensing authority and the police) with a late closing time. If that application succeeds, the club can add its full allowance of TENs of either kind to those dates.178

(5)

Notice: a notice that is given less than ten working days before the event to which it relates, when the premises user has already given the permitted number of late TENs in that calendar year, will be returned as void and the activities described in it will not be authorised.

9.54 Service and acknowledgment of notice A TEN must be given by an individual aged over 18 years.179 The individual thereupon becomes the ‘premises user’ for the purposes of the event.180 (1)

The standard TEN: this notice must be given: (a) to the relevant licensing authority (electronically or in duplicate); (b) the local authorities with responsibility for pollution risk or harm to health in the area in which the

174 Licensing Act 2003, s 101(1). 175 Ibid, s 101(2)–(4), as amended by the Civil Partnerships Act 2004, s 261 and Sch 27. 176 Ibid, s 107(12). 177 Home Office, Revised Guidance issued under section 182 of the Licensing Act 2003 (April 2018) para 7.15. 178 Licensing Act 2003, s 100(1). 179 Ibid, s 100(3). 180 Ibid, s 100(2).

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Temporary event notice 9.55 event is to be held; and (c) the relevant chief officer of police181 not later than 10 working days before the day on which the event period begins;182 it must be in the prescribed form;183 it must be accompanied by the prescribed fee when it is given to the licensing authority;184 and it must contain the following details:185 (a) the relevant licensable activities; (b) the ‘event period’, ie the period (not exceeding 168 hours) during which the licensable activities will be carried on; (c) the times of day during the event period when the licensable activities will be carried on; (d) the maximum number of persons (which must be less than 500) which the premises user proposes will be on the premises at any one time; (e) whether any supply of alcohol will be on or off the premises or both; (f) such other matters as may be prescribed. (2)

The late TEN: this notice must be given to the licensing authority electronically no later than five working days and no earlier than nine working days before the day on which the event begins. Alternatively, it can be given to the relevant licensing authority (otherwise than by means of a relevant electronic facility) and to all the others no later than five days in advance and at least one ‘relevant person’ to whom it has to be given no earlier than nine working days in advance of the event beginning.186

(3)

Acknowledgment: where there is to be a supply of alcohol, the notice must make it a condition of using the premises that such supply is made by or under the authority of the premises user.187 The licensing authority must acknowledge and return one of the two notices before the end of the first working day following the day on which it was received.188 The premises user may withdraw the notice not later than 24 hours before the event period.189 This may be important because a notice duly withdrawn does not count towards the 24-hour restriction mentioned in the next paragraph.

9.55 Licensing authority’s counter notice Where a licensing authority receives a TEN and is satisfied that the provisions limiting the number of applications

181 This means the chief officer of police for the area in which the premises are situated or, where the premises are situated in two or more police areas, the chief officer of police for each area: Licensing Act 2003, s 99A. 182 Ibid, ss  100(7)(a) and 100A inserted by the Police Reform and Social Responsibility Act 2011, s 114. A timely application is essential; there is no power to abridge time. A working day is defined in ibid, s 193 as meaning any other day than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971. 183 Ibid, s 100(4). 184 Ibid, s 100(7)(b) as amended by Police Reform and Social Responsibility Act 2011, s 114(3) (b). 185 Ibid, s 100(5) as amended by the Police Reform and Social Responsibility Act 2011, ss 114 and 115. 186 Ibid, s 100A(3) added by the Police Reform and Social Responsibility Act 2011, s 114. 187 Ibid, s 100(6). 188 If the day or receipt was not a working day, the receipt must follow before the end of the second working day: ibid, s 102(1)(b). 189 Ibid, s 103(1).

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9.56  Supply and Sale of Alcohol by the Club have been exceeded, it must give a counter notice in the prescribed form to the premises user.190 This counter notice excuses the licensing authority from complying with the acknowledgment provisions referred to in 9.54191 but the counter notice must be given not later than 24 hours before the beginning of the event period.192 Where a counter notice is given, the licensing authority must send a copy of it to every relevant person.193 The counter notice overrides the provisions relating to police objections.194 9.56 Objection notice The premises user, having given copies of a TEN notice to all relevant persons in accordance with 9.54, may find that an objection notice is served. That may happen following receipt of the notice, if a ‘relevant person’ is satisfied that allowing the premises to be used as requested in the notice would undermine a licensing objective. In which case, they must give an ‘objection notice’ to the licensing authority, the proposed premises user and every other relevant person before the end of the third working day following the day on which the TEN was given.195 The licensing authority must thereupon hold a hearing to consider the objection notice, unless all are agreed that this is unnecessary.196 The licensing authority must decide either not to give a counter notice or to give one (with reasons), preventing the temporary event from taking place.197 Notice of this decision must be given (with reasons) to the premises user and all relevant persons.198 The decision must be given at least 24 hours before the beginning of the event period.199 9.57 Modification of objection notice At any time before a hearing is held or dispensed with, the relevant persons and the premises user may agree to modify the notice by making changes to the notice as served.200 In this event the objection notice is treated as withdrawn from the time of modification.201 A  copy of the modified notice must be sent to the licensing authority by the relevant person.202 If the premises are situated in more than one police area, every chief officer must consent to the modification.203 9.58 Duty to keep, display and produce temporary event notice The premises user must ensure that the notice, together with a copy of any conditions given in respect of it, is kept at the relevant premises in his custody or in the custody of a nominated person working at the premises.204 He must also ensure that a copy

190 Licensing Act 2003, s 107 as amended by the Police Reform and Social Responsibility Act 2011, s 114. As to the relevant limits, see 9.53 and 9.65. 191 Ibid, s 102(3) as substituted by the Police Reform and Social Responsibility Act 2011, s 114. 192 Ibid, s 107(8). 193 Ibid, s 107(11). A ‘relevant person’ means the chief officer of police and the local authority: see s 99A. 194 Ibid, ss 105(6)(b), 106(6) and 107(9). 195 Ibid, s 104(3). 196 Ibid, s 105(2)(a). 197 Ibid, s 105(3). 198 Ibid, s 105(3). 199 Ibid, s 105(4). 200 Ibid, s 106(2) as amended by the Police Reform and Social Responsibility Act 2011, s 114. 201 Ibid, s 106(3)(a) as amended. 202 Ibid, s 106(4). 203 Ibid, s 99A. 204 Ibid, s  109(3)(a) as amended by the Police Reform and Social Responsibility Act 2011, s 113.

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Temporary event notice 9.62 of the (endorsed) notice is prominently displayed on these premises.205 If he fails to comply without reasonable excuse, the premises user commits an offence.206 9.59 Loss of temporary event notice The licensing authority must provide a copy, upon payment of a fee, if the notice or a statement of conditions has been lost, stolen, damaged or destroyed, when satisfied that the notice has thus become unavailable.207 The application for a replacement notice, however, must be made within one month of the event specified in the notice.208 9.60 Early morning alcohol restriction order This order applies to TENs: see 9.22. 9.61 Police entry into and closure of temporary event premises A constable or other authorised person209 may enter club premises where a TEN is in effect to see whether the premises are being, or are about to be, used for a licensable activity in accordance with an authorisation.210 Such person may use reasonable force to obtain entry.211 A constable or authorised officer also has power to enter at any reasonable time premises to which a TEN relates to assess the likely effect of the notice on the promotion of the crime prevention objective.212 Where there is or expected to be disorder in a local area, the magistrates’ court has power to close for 24 hours all premises in respect of which a TEN has effect in that area on the application of a police officer of the rank of superintendent or above.213 The former power of police officer of the rank of inspector or above to make a 24 hour closure order of identified premises in respect of which a TEN had been granted has been replaced by the Community Protection Notice procedure, available to a police constable or a local authority under sections 43 to 58 of the Anti-social Behaviour, Crime and Policing Act 2014.214

8.  Personal licence 9.62 A  personal licence is a licence granted by a licensing authority to an individual enabling that person to supply, or to authorise the supply, of alcohol in accordance with a premises licence.215 This supply can take place either by retail sale or via supply by or on behalf of a club to, or to the order of, a member of the

205 Licensing Act 2003, s 109(3)(b) as amended by the Police Reform and Social Responsibility Act 2011, s 113. 206 Ibid, s 109(4). 207 Licensing Act 2003, s  110(1) and (1A) as amended by the Police Reform and Social Responsibility Act 2011, s 113(5) and the Deregulation Act 2015, s 72(c) to remove the former requirement that any theft or loss of the document has been reported to the police. 208 Ibid, s 110(2) as amended by the Police Reform and Social Responsibility Act 2011, s 113. 209 Defined as an officer of the licensing authority, an inspector appointed by the fire and rescue authority and a health and safety inspector: see Licensing Act 2003, s 179(6). 210 Licensing Act 2003, s 179(1). 211 Ibid, s 179(3). 212 Ibid, s 108(1). 213 Ibid, s 160(1)(b) and (2). 214 Anti-social Behaviour, Crime and Policing Act 2014, s  181, and Sch  11, para  34 repeals the previous power contained in ss 161–166 of the Licensing Act 2003. Section 44 of the 2014 Act effectively permits the occupier of premises, such as a club, to be subject to a Community Protection Notice due to ‘conduct on or affecting’ the premises. 215 Licensing Act 2003, s 111(1).

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9.63  Supply and Sale of Alcohol by the Club club.216 The ability to authorise the supply of alcohol is important because, as stated in 9.41, there is no requirement in the 2003 Act that the designated premises supervisor, who must hold a personal licence, has to be present on all occasions when alcohol is sold or supplied. A person may only hold one personal licence at any one time.217 A personal licence has effect indefinitely unless it is surrendered, revoked or the holder of it ceases to be entitled to work in the UK.218 9.63 Application for personal licence  Application is made to a licensing authority219 and the procedure for determination is set out in section 120 of the 2003 Act. The salient points to note are that the licensing authority must grant the licence if it appears to it that: (1)

the applicant is aged 18 years or over;

(2) he possesses a licensing qualification220 or is a person of a prescribed description;221 (3)

no personal licence held by him has been forfeited in the period of five years ending with the day the application was made; and

(4)

he has not been convicted of any relevant offence or any foreign offence and is entitled to work in the UK.222

9.64 Continuing duty There is a continuing duty to notify the licensing authority of any relevant conviction or foreign conviction and any requirement to pay an immigration penalty.223 Any change of name or address of the applicant must also be notified to the licensing authority.224 If the holder of a personal licence is charged with a relevant offence, he must produce that licence to the court before which he appears or, if production is not practicable, he must notify the court of the existence of the personal licence, the identity of the licensing authority and the reasons why he cannot produce the licence.225 Failure to do so is in itself an offence.226 The court may, upon conviction of a personal licence holder for a relevant offence, order the forfeiture of the licence or its suspension for a period not exceeding six months,227 and must notify the relevant licensing authority.228

216 Licensing Act 2003, s 111(2). 217 Ibid, s 118. 218 Ibid, s 115 as amended by the Deregulation Act 2015, s 69 and Sch 18, para 3 and the Immigration Act 2016, Sch 4, para 14. 219 Licensing Act 2003, s 117. 220 Defined in ibid, s 120(8). 221 See Licensing Act 2003 (Personal Licences) Regulations 2005, SI 2005/41, reg 4. 222 Licensing Act 2003, s 120(2) as amended by the Immigration Act 2016, Sch 4, para 15. For the numerous ‘relevant offences’ see Sch  4 to the Licensing Act 2003, as amended by Licensing Act 2003 (Personal Licences: Relevant Offences) (Amendment) Order 2005, SI  2005/2366. ‘Foreign offence’ means an offence (other than a relevant offence) committed outside England and Wales: ibid, s 113(3). 223 Licensing Act  2003, ss  123 and 124 as amended by the Immigration Act 2016, Sch  4, para 17. 224 Ibid, s 127. 225 Ibid, s 128. 226 Ibid, s 128(6). 227 Ibid, s 129. 228 Ibid, s 131. The licence holder is under a similar duty of notification: ibid, s 132.

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Appeals 9.67 9.65 Temporary event notices The holder of a personal licence may give up to 50 standard TENs (which may include 10 late TENs) in any one year.229 Apart from this, the same regime applies as set out in 9.50–9.61.

9.  Proprietary clubs 9.66 Inevitably a proprietary club will require a premises licence, rather than a club premises certificate, as they will not meet the conditions for qualification in sections 62, 63 and 64 of the Licensing Act 2003 and will therefore not be a qualifying club within the meaning of the Act. It should also be noted that the proprietor does sell alcohol to the club members.

10. Appeals 9.67 The appeals procedure is set out in the various paragraphs of Schedule 5 to the 2003 Act. Part 1 of the schedule deals with premises licences, Part 2 deals with club premises certificates and Part 3 deals with ‘Other Appeals’. (1)

Club premises certificate: an appeal will lie for the following: rejection of application for club premises certificate under section  72 (paragraph  10); rejection of variation application under section 85 (paragraphs 10 and 12); a decision to impose conditions under section 72 (paragraph 11); a decision on review under section 88 (paragraph 13); and withdrawal of certificate under section 90 (paragraph 14).

(2)

Premises licence: an appeal will lie amongst other things for the following: rejection of applications for a premises licence under section 18 (paragraph 1); a decision to impose conditions under section 18 (paragraph  2); rejection of variation application under sections 35 and 39 (paragraphs 1, 4 and 5); transfer of licence under section 44 (paragraph 6); a decision on the review under section 52 (paragraph 8); and a decision on the summary review under section 53A(2)(b) (paragraph 8A) or a review of interim steps under section 53D.230 An appeal will also lie against the licensing authority’s decision on a review of a premises licence under section 167 following the making of a closure order (paragraph 18).

(3)

Temporary event notice: an appeal will lie where the relevant person231 gives notice of objection under section  104(2) (paragraph  16(1)); and where the licensing authority gives a counter notice under section  105(3) (paragraph 16(2)).232

(4)

Personal licence: an appeal will lie amongst other things where the licensing authority rejects an application for a personal licence under section  120 (paragraph 17(1)); or revokes it under section 124(4) (paragraph 17(4)).

229 Licensing Act 2003, s 107(2)(b), as substituted by the Police Reform and Social Responsibility Act 2011, s 114. 230 Rights of appeal added by Violent Crime Reduction Act 2006, s 22 and the Policing and Crime Act 2017, s 137 respectively. 231 For the meaning of ‘relevant person’, see Licensing Act 2003, s 99A. 232 A  ‘relevant person’ may appeal if the authority decides not to give a counter notice: Licensing Act 2003, Sch 5, para 16(3).

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9.68  Supply and Sale of Alcohol by the Club 9.68 In all cases the appeal is to a magistrates’ court.233 The notice of appeal must be given within 21 days beginning with the day on which the appellant was notified by the licensing authority of the decision appealed against.234 On appeal the magistrates’ court may:235 (1)

dismiss the appeal;

(2) substitute for the decision appealed against any other decision which could have been made by the licensing authority; or (3) remit the case to the licensing authority to dispose of it in accordance with the direction of the court; and (4)

make such order as to costs which it thinks fit.

9.69 Closure of premises It is the magistrates’ court itself which sanctions the closure order, so that the right of appeal against such an order is made to the Crown Court.236 Notice of appeal must be given within 21 days beginning with the day on which the decision appealed against was made.237

11. Fees 9.70

The current (2020) fees are as follows:238

Chargeable bands (non-domestic rateable value): A

B

C

D

E

£0–4,300

£4,301– £33,000

£33,001– £87,000

£87,001– £125,000

£125,001 and above

Club premises certificate: Conversion, new application and variation : £100

£190

£315

£450

£635

£180

£295

£320

£350

Annual charge: £70

Premises licence: The fees are the same as set out above, save that for Band D a multiplier of 2 is applied and for B and E a multiplier of 3 is applied to the specified fee where the premises are used exclusively or primarily for the supply of alcohol for consumption on the premises. Also, where the maximum number of persons allowed on the 233 Licensing Act 2003, Sch  5, paras  9(1), 15(1), 16(4), 17(6) and 18(3), as amended by Courts Act 2003 (Consequential Provisions) Order 2005, SI 2005/886. 234 Ibid, Sch 5, paras 9(2), 15(2), 16(5), 17(7) and 18(5). 235 Ibid, s 181(2). 236 Ibid, s 166(1). 237 Ibid, s 166(2). 238 Licensing Act 2003 (Fees) Regulations 2005, SI 2005/79 as amended by Licensing Act 2003 (Fees) (Amendments) Regulations  2005, SI  2005/357; Licensing Act  2003 (Premises Licences and Club Premises Certificates) (Miscellaneous Amendments) Regulations 2009, SI 2009/1809.

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Offences 9.71 premises at the same time is 5,000 or more, an application must be accompanied by an additional fee.239 Other fees: For a number of minor applications such as notification of a change of address or alteration of the rules and for copies of documentation, the fee is £89; for applications for a transfer of premises licence the fee is £23; for a temporary event notice the fee is £21.240

12. Offences 9.71

The reader is referred to Chapter 18, at 18.18 for this topic.

239 SI 2005/79 (as amended): see the table in Sch 3. 240 A TEN may contain more than one temporary event and a flat fee is chargeable which is not dependent on the number of events comprising the notice.

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Chapter 10

Supply and Sale of Food by the Club

1. Introduction 10.1 Clubs which occupy premises often supply or sell food to members and their guests as part of the social environment of the club. The legal situation was manifestly altered by the Food Safety Act 1990 and the regulations which followed thereafter. The Act has two aspects: (1)

it relates to food safety and hygiene;

(2)

it deals with the club’s supply of food to its members.

10.2 Temporary closure of clubs Clubs need to understand and take heed of restrictions during the coronavirus pandemic of 2020 concerning food and drink supplied or sold by them on their premises, which law came originally into force on 21 March 2020.1 Since then the legislation has much changed and clubs should ensure that they follow the current governmental guidance and legislation in conducting their activity.2

2.  Food safety and hygiene 10.3 The Sale of Food and Drugs Act 1875 established an approach to food law which can be traced to the present-day Food Safety Act 1990. What changed the modern landscape, however, was ‘mad cow disease’3 in the UK. Later in the mid1990s it was confirmed that BSE could be transmitted to human beings. It was this knowledge which seriously alarmed both the UK and the European Union (EU), and it led to a cascade of EU directives, a large number of which became the subject of

1 Health Protection (Coronavirus, Business Closure) (England) Regulations 2020, SI 2020/327. This legislation expressly included clubs. These regulations were subsequently revoked. Those applicable in England as at 1 September 2020 are the Health Protection (Coronavirus, Restrictions) (No 2) (England) Regulations 2020, SI 2020/684 (as amended). 2 See, for example, the Coronavirus Act 2020 enacted on 25 March 2020 (s 87) and which contained 102 sections and 29 schedules. Under s  98 there has to be a parliamentary review of the situation within six months of that date, viz on or before 25 September 2020. Readers are advised to visit www.gov.uk/coronavirus to obtain up-to-date governmental information in relation to club activity. 3 Bovine Spongiform Encephalopathy (BSE). By 1989 there were some 10,000 confirmed cases, which peaked to nearly 37,000 in 1992.

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10.4  Supply and Sale of Food by the Club UK regulations and all of which were accepted as part of the task to give European citizens access to safe and wholesome food. 10.4 Prior to the Food Safety Act 1990 the club’s supply of food to its members on its club premises was not controlled by any Act of Parliament. The prime reason for this exemption was the fact that this supply did not constitute the sale of food, even if it was paid for by the member. The reasoning behind this may be seen from the club’s supply of alcohol to its members (see 9.3), which applies equally to food. The 1990 Act therefore brought clubs within its statutory compass: see 10.5. 10.5 The governing law applicable to clubs The domestic law on food and feed safety is as follows: (1)

Food Safety Act 19904 is the principal Act which deals with food legislation and it created offences in relation to safety, quality and labelling;

(2)

The General Food Law Regulation (EC) 178/20025 created the general principles and requirements of food law across Europe;

(3)

The General Food Regulations 20046 amended the Food Safety Act 1990 to bring it into line with EC Regulation 178/2002;

(4)

The Food Hygiene Regulation (EC) 852/20047 covered the hygiene of food and set out the general hygiene requirements for all food businesses across Europe;

(5)

The Food Hygiene (Wales) Regulations 20068 provided for the execution and enforcement of EC  Regulation 178/2002 and other EC regulations, and generally dealt with the administration of food law procedures;

(6)

Regulation (EU) 1169/20119 on the provision of food information to consumers;

(7)

The Food Safety and Hygiene (England) Regulations 201310 provided for the execution and enforcement of EC  Regulation 178/2002 and other EC regulations, and generally dealt with the administration of food law procedures.

At the time of writing UK replacement legislation to deal with the fact that the EU regulations were no longer applicable in the UK after 31 December 2020 had not yet been produced. It seems likely that initially such legislation will reproduce the EU rules, at least for some time.11 10.6 The ambit of the Food Safety Act 1990. The club needs to understand why the food safety law applies to their activities. The Food Safety Act 1990 starts off with what is calls its ‘basic expressions’:

4 Amended by the Food Safety Act 1990 (Amendment) Regulations 2004, SI 2004/2990. 5 [2002] OJ L 31/1. 6 SI 2004/3279. 7 [2004] OJ L 226/3. 8 SI  2006/31 (W5) and see Food Law: Code of Practice (Wales) laid before the National Assembly of Wales in August 2018. 9 [2011] OJL 304. 10 SI  2013/2996 as amended by the Food Safety and Hygiene (England)(Amendment) Regulations 2014, SI 2014/2885. See also Food Law Code of Practice (England) published March 2017. 11 See The General Food Hygiene (Amendment) (EU Exit) Regulations 2019, SI 2019/642.

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Food safety and hygiene 10.9 (a)

‘food’: this has the same meaning as in EC Regulation 178/2002.12 Now in ordinary parlance food does not include liquid drinks. However, article 2 of this regulation defined food as ‘any substance or product, whether processed, partially processed or unprocessed, intended to be, or reasonably expected to be ingested by humans’. The article then continued: ‘“Food” includes drink, chewing gum and any substance including water, intentionally incorporated into the food during its manufacture, preparation or treatment’ (emphasis added). Thus food would include alcohol such as beer or gin;

(b) ‘food business’: this means any business in the course of which commercial operations are carried out;13 (c)

‘business’: this includes ‘the undertaking of a club’, whether it is carried on for profit or not;

(d) ‘commercial operation’: this includes possessing food for sale; offering food for sale; and the sale of food;14 (e)

‘food premises’: this means any premises in the course of which commercial operations with respect to food are carried out.15

(f)

‘sale of food’: section 2 of the Act gives an extended meaning to this phrase, ie ‘the supply of food, otherwise than on sale, in the course of a business… shall be deemed to be a sale of the food’.16

10.7 ‘Food business operator’ In relation to item (b) of 10.6, it should be noted that the Food Safety Act 1990 as originally enacted referred to the ‘proprietor of a food business’. This terminology was replaced by the phrase ‘food business operator’ as defined in article 3 of EC Regulation 178/2002.17 10.8 It should be further noted that if the club is incorporated and has a legal personality, say the Basset Town Club Limited, this entity will be the food business operator. If unincorporated, it is the Committee who is responsible for the transactions and activities carried on by the club18 and they will be acting collectively as the food business operator. 10.9 The legal situation Accordingly, it will be seen from the combination of items (b), (c) and (f) of 10.6 that where a club supplies food in its clubhouse to the member (for himself and his guest) the Food Safety Act 1990 will apply. It also demonstrates that if, for example, the club gives away food in the clubhouse by supplying sandwiches or a meal to a visiting team of sports players or bridge or chess players, this will be deemed to be a sale of the food and thus comes within the Act. It should be pointed out too that where a bottle of wine (which counts as food) or a box of chocolates or a jar of home-made jam is given away by the club as prizes in a club raffle during a social gathering, the Act will apply in this situation.19

12 Food Safety Act 1990, s 1(1). 13 Ibid, s 1(3). 14 Ibid, s 1(3)(a). 15 Ibid, s 1(3). 16 Ibid, s 2(1)(a). 17 See Atwood, Thompson & Willett, Food Law (3rd edn, 2009) para 4.8.1. 18 See 1.12. 19 Food Safety Act 1990, s 2(2).

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10.10  Supply and Sale of Food by the Club

3.  Registration of the club 10.10 Registration of the club as a food business operator This is required under article  6(2) of EC  Regulation 852/2004 and should be a simple procedure.20 A model application form may be seen on the website of the Food Standards Agency.21 It is to be noted that in the form under clause 3 (Type of food activities) the applicant has to indicate which of the stated categories the food business operator belongs, but there is no listed category of ‘club’. The club’s application would therefore fall under the category of ‘Other (please give details)’. For example, ‘Other: the Higher Basset Village Club in the county of Bassetshire, which is an unincorporated members’ club established for residents’ social activity’. The club must register its establishment at least 28 days before food operations commence. Once registered, if there are any changes to the details supplied, the local authority must be notified as soon as possible and not later than 28 days after the change has happened. Once registered with the local authority, the club only needs to notify them22 if: (1) there is a change of proprietor (the new proprietor must complete a new registration form); (2)

the nature of the business changes;

(3) the business stops trading. The club must fill in a de-registration form and send it to the local authority. 10.11 Duties of the registered club As a food business operator the club is required to ensure that the food law legislation is properly implemented and that its food handlers are adequately supervised, instructed and trained in food safety matters.23 10.12 Food Standards Agency This is an independent food safety watchdog and was set up by the Government in 2000 amid concerns about intensive farming and the ‘mad cow disease’ problem, with the task of protecting the public’s health and consumer interests in relation to food. It runs a detailed website (www.food. gov.uk), which clubs should find useful. The club’s local authority will also be approachable on this matter and they can advise on the implementation of a food management system.

4.  Risk assessment 10.13 A  club which operates a food business must have HACCP procedures in place.24 HACCP stands for Hazard Analysis and Critical Control Points. This legislation on the hygienic production and marketing of food was introduced by

20 EC Guidance Document on EC Regulation 852/2004 (2018) para 6.1. 21 See its Food Law Code of Practice (England) (March 2017) section 3.2 and Appendix 5 (model application form). 22 Ibid, section 3.3.17. 23 See 10.16. 24 EC Regulation 852/2004, article 5.

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Risk assessment 10.15 EC regulation in 2004. Annex II of EC Regulation 852/2004 sets out the general hygiene requirements of all food business operators, which in summary is as follows: (1)

Chapter I provides that all permanent food premises must be kept clean and maintained in good repair and condition. For example, maintenance must be established in such a way that it protects against pests, deals with the accumulation of dirt and prevents condensation and mould. See 10.14 for the scope of this duty;

(2)

Chapter II sets out similar requirements for rooms used for the preparation, treatment and processes of food (excluding dining areas). See 10.15 for the scope of this duty;

(3)

Chapter III sets out the requirements for temporary food premises;

(4)

Chapter IV deals with the transportation of food.

It would be a wise move to nominate a member of the Committee to be responsible for keeping the club’s catering system under review, so that the food it supplies to its members and their guests is at all times safe for human consumption. 10.14 Food premises25 There are general requirements for food premises with which the club must comply.26 These requirements relate to: (1)

the cleanliness of the premises;

(2)

the design and condition of the premises;

(3)

lavatories and washbasins;

(4)

hand-washing equipment;

(5)

ventilation of the premises generally;

(6)

ventilation of sanitary conveniences;

(7) lighting; (8) drainage; (9)

changing facilities for staff.

10.15 There are specific requirements for rooms where foodstuffs are prepared and in respect of which the club must comply.27 These requirements relate to: (1)

floor surfaces;

(2)

wall surfaces;

(3)

ceilings and overhead fixings;

(4)

windows and other openings;

(5) doors; (6)

work surfaces;

(7)

the cleaning of equipment;

25 As defined in item (e) of 10.6. 26 EC Regulation 852/2004, Annex II, Chapter I. 27 Ibid, Annex II, Chapter II.

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10.16  Supply and Sale of Food by the Club (8)

the washing of food.

In a nutshell, the law is making sure that the club, and in particular its kitchen, is clean and hygienic at all times.

5.  Staff training 10.16 A club in its capacity of a food business operator must ensure that food handlers at the club receive appropriate supervision and training in food hygiene. First, Chapter VIII of Annex II of Regulation 852/2004 states that ‘every person working in a food-handling area is to maintain a high degree of personal cleanliness and is to wear suitable, clean and, where necessary, protective clothing’. Secondly, the club should ensure that risk assessment is properly explained to the staff employed in the preparation and service of food. And, thirdly, training of staff relating to the hygienic preparation, packaging and treatment of foods is important. An ideal situation is where staff have a Level 2 Award in Food Safety in Catering, but this is not a legal requirement. The local authority may be able to provide free or inexpensive training if the club so desires.

6.  Local surveillance 10.17 The Food Safety Act 1990 does not in itself deal with hygiene matters, but it runs in parallel with the hygiene surveillance prescribed by the Food Safety and Hygiene (England) Regulations 2013.28 Wales: The Food Hygiene (Wales) Regulations 200629 run on the same lines as the English regulations. 10.18 Hygiene improvement notice Issued under regulation 6 of the Food Safety and Hygiene (England) Regulations 2013. This notice may be served on the food business operator by the local authority’s authorised officer who has reasonable grounds for believing that the operator is failing to comply with hygiene regulations or with any regulation controlling the process or treatment of food. To constitute a valid notice, the notice must: (1) state the officer’s grounds for believing that the operator is failing to comply with the regulations; (2) specify the matters which constitute the operator’s failure to comply; (3) specify the steps which, in the officer’s opinion, the operator must take in order to secure compliance; and (4) require the operator to take those measures, or measures which are at least equivalent to them, within such period (not less than 14 days) as may be specified in the notice. Failure to comply with an improvement notice constitutes an offence.30

28 SI 2013/2996, authorised by the European Communities Act 1972. 29 SI 2006/31 (W5) and see Food Law: Code of Practice (Wales) (August 2018). 30 Food Safety Act 1990, s 10(2).

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The supply of proper food 10.25 10.19 An appeal against a hygiene improvement notice lies to the magistrates’ court31 and, if this is dismissed, a further appeal lies to the Crown Court.32 10.20 Hygiene prohibition order Issued under regulation 7 of the Food Safety and Hygiene (England) Regulations 2013. This provides for two classes of administrative action by the magistrates’ courts. First, consequent upon the conviction of a food business operator of an offence under the said regulations, the court shall prohibit: (a) the use of any process or treatment of food for the purposes of the business in question; and/or (b) the use of its premises or its equipment for the purposes of any food business. Secondly, the court is empowered to ban a food business operator convicted of an offence under the hygiene regulations from participating in the management of any food business. 10.21 Any person aggrieved by the decision of the magistrates’ court may appeal to the Crown Court.33 10.22 Hygiene emergency prohibition notice Issued under regulation 8 of the Food Safety and Hygiene (England) Regulations 2013. Where an authorised officer of the local authority is satisfied that the health-risk condition is fulfilled with respect to any food business, the officer may serve a hygiene emergency prohibition notice on the food business operator, imposing the appropriate prohibition. The officer then has three days within which to apply for and obtain a hygiene emergency prohibition order from the magistrates’ court (otherwise the notice lapses). Also, the officer shall not apply for such an order unless, at least one day before the date of the application, he has served notice on the food business operator of his intention to apply for this order. 10.23 Powers of entry An authorised officer of a local authority, on producing (if so required) some duly authenticated document showing authorisation, has the right at all reasonable hours to enter premises within the authority’s area for the purpose of ascertaining whether there has been a contravention of the Food Safety Act 1990 or any regulation or order made under it.34

7.  The supply of proper food 10.24 Insofar as clubs are concerned, section 2 of the Food Safety Act 1990 construes sale as encompassing that of supply (see item (f) of 10.6), and therefore the club as supplier has a statutory duty towards its members and/or their guests in relation to the food it supplies to them. Hitherto this duty did not exist.35 10.25 Statutory protection of the club member as consumer Section 14 of the Food Safety Act 1990 has taken over the role as the principal protector of the consumer in relation to unsatisfactory food, that is to say, any person who sells to the purchaser’s prejudice any food which is not of the nature or the substance or the quality demanded by the purchaser shall be guilty of an offence. 31 32 33 34 35

Food Safety and Hygiene (England) Regulations 2013, reg 22. Ibid, reg 23(a). Ibid, reg 23(b). Ibid, reg 16. Eg the equivalent s 2 of the Food Act 1984 was restricted to the sale of food.

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10.26  Supply and Sale of Food by the Club 10.26 The concepts of nature, substance and quality in this connection are well known to the law: ‘Nature’: this term means a different sort of food is supplied from that demanded by the purchaser. For example, if re-formed white fish were sold as scampi.36 ‘Substance’: this term is usually applied to circumstances in which the composition of the food is incompatible with what was demanded. For example, where a caterpillar was found in a tin of peas37 or where excess penicillin was found in milk.38 ‘Quality’: this term means the grade of goodness which an ordinary purchaser would expect to receive. For example, he would not expect to find excess fat in minced beef39 or excess sugar in diet cola40 or to be given mouldy food.41 10.27 Food allergies This involves the reaction of a consumer to certain types of food which can cause serious illness or death. There are 14 allergens which the club must concern itself with as a food business operator. They are as follows: celery; cereals that contain gluten (eg wheat, barley, rye and oats); crustaceans (eg prawns, crabs, lobster); eggs; fish; lupin; milk; mustard; peanuts; sesame seed; soybeans; sulphur dioxide and sulphites (if they are a concentration of more than ten parts per million); tree nuts (eg almonds, hazel nuts, walnuts, brazil nuts, cashews, pecans, pistachios, macadamia nuts). 10.28 The food business operator has a legal responsibility to sell or serve safe food for the consumer to eat. The operator is required to provide allergen information and to follow labelling rules as set out in European Union food law.42 This entails: (1)

providing allergen information for pre-packed and non-prepacked food and drink; and

(2)

handling and managing allergens effectively in food preparation.

This latter duty means that the staff of the club should receive training on allergens.

8. Offences 10.29 The reader is referred to Chapter 18 at 18.23 for this topic.

36 37 38 39 40 41 42

Preston v Green Close Ltd (1975) 139 JP 245. Smedleys Ltd v Breed [1974] AC 839. Hall v Owen-Jones and Jones (t/a Central Dairies) [1967] 1 WLR 1362. TW Lawrence & Sons Ltd v Burleigh (1981) 146 JP 134. McDonald’s Hamburgers Ltd v Windle (1986) 151 JP 333. Watford Borough Council v Maypole Ltd [1970] 1 QB 573. See Regulation (EU) 1169/2011 and see The Food Information Regulations 2014, SI 2014/1855, as amended by SI 2019/1218 and SI 2020/541.

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Chapter 11

Entertainment Provided by the Club

1. Introduction 11.1 Entertainments of various kinds are staged or provided by clubs, sometimes as part of a club’s core activities, sometimes for the enjoyment of its members, and at other times to raise funds for the club. It is a sphere of activity which needs the club’s attention because in putting on the entertainment other people’s rights are often affected (we are here talking about copyright), and many entertainments are regulated by local government as a matter of public policy (we are here talking about the need for authorisation). The topic of entertainment was revisited by the Licensing Act 2003 with the result that much entertainment provided in clubs is now regulated by this Act, even though no alcohol is being supplied at the entertainment and even though no member of the public is present at the entertainment. The topic was further regulated by the Live Music Act 2012. The question of noise nuisance should also be borne in mind.1 What is set out below applies to all clubs of whatever type they may be.

2. Copyright 11.2 What is protected Copyright in England and Wales stemmed from the common law with some statutory law in the early eighteenth century, and it became wholly statutory with the Copyright Act 2011. The current principal Act is the Copyright, Designs and Patents Act 1988.2 Copyright is an economic and 1 See 11.24. 2 The ancillary regulation is profuse and we simply identify it here in date order: the Copyright and Related Rights Regulations 2003; the Copyright Tribunal Rules 2010; the Copyright, Designs and Patents Act  1988 (Amendment) Regulations  2010; the Copyright and Duration of Rights in Performances Regulations 2013; the Copyright and Duration of Rights in Performances (Amendment) Regulations 2014; the Copyright (Regulation of Relevant Licensing Bodies) Regulations 2014; the Copyright and Duration of Rights in Performances (Disability) Regulations 2014; the Copyright (Public Administration) Regulations 2014; the Copyright and Rights in Performances (Quotation and Parody) Regulations 2014; the Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014; the Copyright and Rights in Performances (Extended Collective Licensing) Regulations 2014; the Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014; the Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014; the Collective Management of Copyright (EU  Directive) Regulations 2016; the Copyright (Free Public Showing or Playing) (Amendment) Regulations 2016; the Copyright and Related Rights (Marrakesh Treaty etc) (Amendment) Regulations 2018.

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11.3  Entertainment Provided by the Club property right which enables the creator to earn money and is to be distinguished from his moral rights in the same material which protects his reputation. Copyright gives the creator the ability to control the manner in which his material may be used, so long as the works are regarded as original3 and exhibit a degree of skill, labour or judgement.4 The following list describes the works and other matters to which the law of copyright applies: (1)

literary works: books, commercial documents, computer programs, leaflets, manuals, newsletters and articles, and song lyrics;5

(2)

dramatic works: plays and dance, etc;6

(3)

musical works: recordings and score;7

(4)

artistic works: photography, painting, sculptures, technical drawings, maps, etc;8

(5)

sound recordings: this may be of other copyright works, eg musical or literary;9

(6) films;10 (7) broadcasts;11 (8) typographical arrangements of published editions: magazines and journals, etc.12 11.3 Fair dealing There are certain areas of activity labelled as ‘fair dealing’ where a person is permitted to make copies which do not infringe copyright, and they include the following: (1)

a temporary copy;13

(2)

private use;14

(3)

research and private study;15

(4)

lawful computational analysis of a copyright work;16

(5)

criticism or review; quotation; news reporting;17

(6)

caricature, parody, and pastiche;18

(7)

incidental inclusion in a lawful text.19

3

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Copyright, Designs and Patents Act  1988, s  1. We add that the copyright owner has exclusive rights to make adaptations of the original work so that, for example, an outsider editing a play or putting on an abridged version would not escape the copyright legislation: Ibid, ss 16(1)(e) and 21(1). Interlego AG v Tyco Industries Inc [1989] AC 217 (Lord Oliver) (Hong Kong). Copyright, Designs and Patents Act 1988, s 3. Ibid, s 3. Ibid, s 3. Ibid, s 4. Ibid, s 5A. Ibid, s 5B. Ibid, s 6. Ibid, s 8. Ibid, s 28A. Ibid, s 28B. Ibid, s 29. Ibid, s 29A. Ibid, s 30. Ibid, s 30A. Ibid, s 31.

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Copyright 11.5 Another important exception is that no breach of copyright takes place in domestic or quasi-domestic situations where a recording, for example, is played amongst family members.20 11.4 The scope of copyright Copyright law seeks to strike a balance between the interests of copyright owners and the users of copyright material in a way which benefits society as a whole. The width of copyright sometimes surprises lay people. For example, when a play has been published to the general public, people have been heard to ask why it cannot be performed without more ado. The answer is that if it is in copyright, the club must apply for performance rights, even for amateur productions. 11.5 Performance in public The performance of a work in public is an act restricted by the copyright in a literary, dramatic or musical work. The purpose of the copyright legislation is to protect the copyright owner in those situations where the listener or viewer would normally expect to have to pay for such entertainment. Hence the importance of the concept of performance in public. The question is solely one of fact. A members’ club might be forgiven for thinking that performance limited to an audience of its own members (and their guests) was not a performance in public. But the club would be wrong: the factual situation has to be looked at from the copyright owner’s point of view. Would the owner regard the audience as part of his public? If so, the performance is ‘in public’, even if as between the performers and the audience each side would regard the performance as being in private. Thus in Harms (Incorporated) Ltd v Martans Club Ltd21 the performance of music by a dance band restricted to club members and their guests in a proprietary social club was held to be in public and in breach of copyright. An emphatic case is Jennings v Stephens22 where the members of the Overstone and Sywell Dramatic Society gave an amateur performance of a play in a village hall solely in front of the members of the Duston Women’s Institute. This performance was held to be in public and in breach of copyright.23 Lord Justice Romer commented:24 ‘Suppose, for instance, that a number of people who are interested in the drama bound themselves together in a society or club for the purpose of providing by means of their subscription the performance before themselves from time to time of dramatic works. This must be something entirely outside their domestic lives and they would, in my opinion, attend performances merely as members of the public, and none the less because the section of the public which they represented may be limited by election [to the club].’ In the same case Lord Justice Greene said that the same result would have followed had the play been performed by members of the Women’s Institute itself.25 20 Duck v Bates [1884] 13 QBD 843, CA (performance of a dramatic work at Guy’s Hospital where the audience which comprised members of the staff and their friends was held to be a quasi-domestic event); Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd [1943] Ch 167, CA, at 175 (Goddard LJ). 21 [1927] 1 Ch 526. 22 [1936] 1 Ch 469, CA. 23 See also Performing Right Society v Rangers Football Club Supporters Club 1974 SLT 151, Ct of Sess (performance of musical works at football supporters’ club held to be in public); Ernest Turner Electrical Instruments  Ltd v Performing Right Society  Ltd [1943] Ch  167,  CA (music played to employees of a factory whilst they were working held to be a performance in public). 24 [1936] 1 Ch 469, CA, at 482. 25 Ibid, at 484.

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11.6  Entertainment Provided by the Club 11.6 Television and radio As originally enacted, section 72 of the Copyright, Designs and Patents Act 1988 allowed a club, which did not charge for admission, to show television broadcasts and any film contained in the broadcast to its members at the club without obtaining the permission of the copyright holder. However, in 2016, as a result of the Football Association Premier League case,26 the Government removed the reference to ‘film’ in the section 72 exception.27 And the playing of sound recordings on club premises is also now governed by the copyright regime.28 The overall effect of the amended legislation is that if a club has a television or radio playing for the benefit of the club members, the club will need a television-and-radio licence, and may also need a licence from PRS for Music29 and a further licence from Phonographic Performances Limited,30 save where the programme being broadcast does not include (a) any literary, dramatic or musical works which are subject to copyright or (b) any commercially released sound recordings.31 11.7 Collective management organisations A  collective management organisation (CMO) is a licensing body introduced in 201632 which grants rights on behalf of multiple rights holders in a combined (‘blanket’) licence for a single payment. Generally speaking, rights holders will join a CMO as members and instruct it to license rights on their behalf. The CMOs are useful because they save the club from having to deal with separate copyrights. For example, the club may find that the copyright in the words of the song belongs to one person, the songwriter; the copyright in the music belongs to another person, the composer; and the copyright in the recording itself belongs to a third person, the recording company.33 Thus a collective licence is a good idea. There is a goodly number of these CMOs and they can be identified from the Government website.34 The CMOs often occupy a powerful position and if the club is unhappy with the price they seek or the reasonableness of the terms and conditions in the licence offered by them, the club may appeal to the Copyright Tribunal.35 11.8

Duration of copyright The duration of copyright is as follows:

(1)

literary, dramatic, musical or artistic works: 70 years from the end of the calendar year in which the author (or the last author) dies;36

(2)

sound recordings: 50 years from the end of the calendar year in which the work was created or, if the work was published, 50 years from the end of the year in which the work was first published;37

26 See Football Association Premier League Ltd v QC Leisure [2012] EWCA Civ 1708. 27 Copyright (Free Public Showing or Playing) (Amendment) Regulations 2016, SI 2016/565. 28 This was achieved by omitting s  67(4) of Copyright, Designs and Patents Act 1988 by virtue of reg  3(1) of the Copyright, Designs and Patents Act  1988 (Amendment) Regulations 2010, SI 2010/2694. 29 www.prsformusic.com. 30 www.ppluk.com. 31 See Copinger and Skone James on Copyright (17th edn, 2016) paras 9-294–9-304 9.200. 32 The Collective Management of Copyright (EU  Directive) Regulations 2016, SI  2016/221 (based on the EU Directive 2014/26/EU). 33 See Gramophone Co Ltd v Stephen Cawardine & Co [1934] Ch 450. 34 See www.gov.uk. 35 Ibid. 36 Copyright, Designs and Patents Act 1988, s 12. 37 Ibid, s 13A.

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Regulated entertainment 11.12 (3)

films: 70 years from the end of the calendar year in which the last principal director, author or composer dies;38

(4)

broadcasts: 50 years from the end of the calendar year in which the broadcast was made;39

(5)

typographical arrangement of published editions: 25 years from the end of the calendar year in which the work was first published.40

11.9 Remedies The remedies for breach of copyright are damages; an injunction to prevent further breach; an account of profits made as a result of the breach; and delivery up of the offending material.41 11.10 Offences Where copyright is infringed by the public performance of a literary or dramatic or musical work, any person who caused the work to be performed, played or shown is guilty of a criminal offence if he knew or had reason to believe that copyright would be infringed; or he intended to make a gain for himself or another person; or he knew or had reason to believe that communicating the work to the public would cause loss to the copyright holder.42 Performance in a club would constitute public performance.43

3.  Publishing books 11.11 The publisher of any printed book within the United Kingdom is obliged by statute to send a copy to the British Library Board within one month of publication and to certain other libraries on their request for a copy.44 A book is widely defined: it includes any book, pamphlet or magazine, and any map, plan, chart or table.45 By and large, club literature will not be subject to this obligation because the material is not ‘published’, that is to say, copies of the work are not issued to the public. However, it would be different if a club were to publish a history of the club which was available for sale in the local shops or if the club were to publish a booklet on the aims of the club or the facilities which it offered and made this booklet available generally. In these circumstances we consider that the statutory obligation would arise.

4.  Regulated entertainment 11.12 Overview The Licensing Act 2003 (‘the 2003 Act’) introduced a simpler regime than had hitherto existed,46 but one that brings more control over the club. 38 Copyright, Designs and Patents Act 1988, s 13B. 39 Ibid, s 14. 40 Ibid, s 15. 41 Ibid, ss 96 and 97. 42 Ibid, s 107(2A), (2B), (3), as substituted by the Digital Economy Act 2017, s 32. 43 See 11.5. 44 Legal Deposit Libraries Act 2003, s 1. 45 Ibid, s 1(3). 46 The former regime depended on the distinction, now abolished, whether the entertainment was being provided to members of the public generally or whether it was restricted to a specified class of persons, such as club members and their guests. Only the former type of entertainment required a licence.

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11.13  Entertainment Provided by the Club The 2003 Act is concerned with what it calls regulated entertainment, which falls into two defined categories: (1) entertainment; and (2) entertainment facilities. This regime was modified by the Live Music Act 2012 by partially deregulating the performance of live music and removing the regulation concerning the provision of entertainment facilities which are now free from local authority control. The provision of regulated entertainment is a licensable activity47 and the regulated entertainment is required to be authorised by the local authority.48 Although the supply of alcohol and the provision of entertainment often go hand-in-hand, they are treated as independent and separate matters under the 2003 Act. The provision of regulated entertainment by the club to its members and guests is a qualifying club activity for a club premises certificate.49 Schedule 1 to the 2003 Act50 contains the detailed provisions which apply to regulated entertainment. As stated in 9.2(1), all authorisations relating to one set of premises are now contained in a single licensing document. 11.13 Categories of regulated entertainment There are eight categories of regulated entertainment which fall within the 2003 Act. The entertainment will be regulated where it takes place in the presence of: (a) the members and guests of a qualifying club;51 or (b) a public audience;52 or (c) a private audience and a charge is made with a view to making a profit.53 An audience includes spectators.54 The obvious should be stated: all of the following events must be wholly or partly provided for the purpose of entertaining the persons present55 so that, for example, a purely educational film would not require any authorisation. (1)

a performance of a play:56 (a) this means a performance of any dramatic piece, where the whole or a major proportion of it involves the playing of a role by one or more persons, who are actually present, by way of speech, singing or action (including improvisation);57 (b) a rehearsal counts as a performance;58 (c) the Minister stated in the House of Commons on 1  April 2003 that poetry readings and performances by stand-up comedians (which do not involve music) will not count as regulated entertainment;59

47 48 49 50 51 52 53 54

55 56 57 58 59

Licensing Act 2003, s 1(1). Ibid, s 2. Ibid, s 1(2)(c). As amended by the Live Music Act 2012, s 12. Licensing Act 2003, Sch 1, para 1(2)(b) as amended by the Live Music Act 2012, s 2. Ibid, Sch 1, para 1(2)(a) as amended by the Live Music Act 2012, s 2. Ibid, Sch 1, para 1(2)(c) as amended by the Live Music Act 2012, s 2. Licensing Act 2003, Sch 1, para 2(2) as amended by the Licensing Act 2003 (Descriptions of Entertainment) (Amendment) Order 2013, SI  2013/1578. Technically an audience hears and spectators see but the Chambers Dictionary (2016) defines an audience as ‘an assembly of hearers or spectators’ so perhaps the rider was unnecessary. Licensing Act 2003, Sch 1, para 2(1A) as amended by article 3 of the aforesaid Order. Ibid, Sch 1, para 2(1)(a). Ibid, Sch 1, para 14(1). Ibid, Sch 1, para 14(2). Hansard, HC Standing Committee D, col 62 (a statement probably covered by the rule in Pepper v Hart [1993] AC 593).

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Regulated entertainment 11.13 (d) if the audience consists of more than 500 persons or the entertainment takes place before 8:00am on any day or after 11:00pm on any day, the performance will be regulated.60 (2)

an exhibition of a film:61 this means any exhibition of moving pictures;62

(3)

an indoor sporting event:63 (a) this means any sporting event which takes place inside a building where the spectators are accommodated wholly inside that building;64 (b) a sporting event means any contest, exhibition or display of any sport other than a boxing or wrestling entertainment;65 (c) sport includes any game in which physical skill is the predominant factor or any form of physical recreation which is also engaged in for the purposes of competition or display;66 (d) a building means any roofed structure (other than a structure with a roof which may be open or closed) and includes a vehicle, vessel or moveable structure;67 (e) if the audience consists of more than 1,000 persons or the indoor sporting event takes place either before 8:00am on any day or after 11:00pm on any day, the event will be regulated;68

(4)

A boxing or wrestling entertainment:69 (a) this means any contest, exhibition or display of boxing or wrestling or combining boxing or wrestling with one or more martial arts;70 (b) the reason for this sport being in a separate category is that it will count as regulated entertainment whether it is carried on indoors or outdoors;

(5)

a performance of live music:71 for the purposes of this and the next category music includes vocal or instrumental music or any combination of the two;72

(6)

any playing of recorded music:73 it is thought that on many occasions the ‘incidental music’ exemption will apply to this form of entertainment (see 11.16(3) below);

60 Licensing Act 2003, Sch 1, para 2(1B), inserted by the Licensing Act 2003 (Descriptions Entertainment) (Amendment) Order 2013, SI 2013/1578, article 2(3). 61 Ibid, Sch 1, para 2(1)(b). 62 Ibid, Sch 1, para 15. 63 Ibid, Sch 1, para 2(1)(c). 64 Ibid, Sch 1, para 16(1). 65 Ibid, Sch  1, para  16(2), as amended by the Licensing Act 2003 (Descriptions of Entertainment) (Amendment) Order 2013, SI 2013/1578, article 3. 66 Ibid, Sch 1, para 16(2). 67 Ibid, Sch 1, para 16(2). 68 Ibid, Sch 1 para 2(1C), substituted by the Licensing Act 2003 (Descriptions of Entertainment) (Amendment) Order 2013, SI 2013/1578, article 2(2). 69 Ibid, Sch 1, para 2(1)(d). 70 Ibid, Sch 1, para 17 as amended by the Licensing Act 2003 (Descriptions of Entertainment) (Amendment) Order 2013, SI 2013/1578, article 4 71 Ibid, Sch 1, para 2(1)(e). 72 Ibid, Sch 1, para 18. 73 Ibid, Sch 1, para 2(1)(f).

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11.14  Entertainment Provided by the Club (7)

a performance of dance:74 If the audience consists of more than 500 persons or the performance takes place before 8:00am on any day or after 11.00pm on any day, the performance will be regulated;

(8)

entertainment of a similar description to that falling within categories (5), (6) and (7).75

11.14 The Secretary of State has the power to amend the description of regulated entertainment.76 11.15 Threshold test For entertainment to be regulated it must not only come within the above definitions but, in relation to clubs, it must also satisfy two conditions: (1) the entertainment must be provided exclusively to the members (including their guests) of a qualifying club;77 (2)

premises must be made available for the purpose of enabling the entertainment to take place.78

11.16 Exemptions The 2003 Act then proceeds to enumerate the various exemptions to its regime.79 The seven relevant types of exemption are as follows: (1)

films for advertising, informing or educating;80

(2)

film exhibitions in museums and art galleries;81

(3)

music incidental to non-regulated activities:82 (a) the provision of entertainment consisting of the performance of live music, the playing of recorded music or the exhibition of a film is not regulated to the extent that it is incidental to some other activity which is not itself regulated entertainment; (b) the 2003 Act does not define the word ‘incidental’ which is no doubt used in its meaning of ‘accompanying in a subordinate capacity’. An example would be a piano being played in the background in a club or restaurant; (c) the exemption is also intended to preserve the relaxation contained in section 182 of the Licensing Act 1964 whereby live music and singing by ‘not more than two performers’ was permitted without any licence in premises of public entertainment (the so-called ‘two-in-a-bar’ rule). The music and singing here will be incidental to the main activity carried on in the bar of a club, namely, the provision of food and drink.

74 75 76 77 78 79

80 81 82

Licensing Act 2003, Sch 1, para 2(1)(g). Ibid, Sch 1, para 2(1)(h) and 2(1A). Ibid, Sch 1, para 4, as amended by the Live Music Act 2012, s 2(8). Ibid, Sch 1, para 1(2), as amended by the Live Music Act 2012, s 2(2). For the definition of a qualifying club, see 9.11. Ibid, Sch 1, para 1(3), as substituted by the Live Music Act 2012, s 2(4). Ibid, Sch 1, Part 2. For the avoidance of doubt, the exemption entitled ‘Film exhibitions in community premises’ is not an exemption applicable to clubs in that ‘community premises’ are defined in s 193 of the Licensing Act 2003 (as amended) as being (a) a church or chapel hall or similar or (b) a village or parish hall or similar. Ibid, Sch 1, para 5. Ibid, Sch 1, para 6. Ibid, Sch 1, para 7, as substituted by the Live Music Act 2012, s 2(9).

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Procedures relating to authorisations etc 11.18 (4)

television and radio:83 the normal use of a television and a radio is not regulated under the 2003 Act (their use is regulated by the Communications Act 2003);84

(5)

garden fetes:85 (a) the provision of any entertainment at a garden fete or similar function or event (such as a bazaar or sale of work, but not a car boot sale) is not regulated unless it is promoted with a view to applying the whole or part of its proceeds for the purposes of private gain; (b) private gain in this context has the same meaning as set out in section  19(3) of the Gambling Act  2005,86 that is to say, there is no private gain despite the fact that one or more individuals obtain a benefit from the activity in question, provided the benefit occurs in the course of the activities of a non-commercial society;87 (c) the use of the word ‘garden’ would suggest that only outdoor functions or events can take the benefit of this exemption.

(6)

morris dancing:88 morris dancing (or similar) is not regulated where it is performed with live or recorded music that is an integral part of the performance;

(7)

moving vehicles:89 the provision of entertainment on a moving vehicle is not regulated. This exemption is no doubt intended to cater for street carnivals and the like.

11.17 The above exemptions will only apply where there is no sale or supply of alcohol by the club when the entertainment is being provided. If alcohol is available, then the appropriate authorisation will be needed, that is to say, a club premises certificate or a premises licence or a temporary event notice. It should also be noted that the spontaneous performance of music, singing or dancing does not amount to the provision of regulated entertainment and is not a licensable activity.90

5.  Procedures relating to authorisations etc 11.18 Since there is now one unified system of licensing which applies to both the sale and supply of alcohol and the provision of regulated entertainment, the reader is referred to Chapter 9 which deals with the necessary procedures: (1)

licensable activities: see 9.6;

83 Licensing Act 2003, Sch 1, para 8, as amended by the Live Music Act 2012, s 2(10). 84 See 11.23. 85 Licensing Act 2003, Sch 1, para 10. 86 Ibid, Sch 1, para 10(3), as amended by Gambling Act 2005, Sch 16, para 20(3) and the Live Music Act 2012, s 2(12). 87 See further 12.15. 88 Licensing Act 2003, Sch 1, para 11, as amended by the Live Music Act 2012, ss 2(13) and 3(2). 89 Ibid, Sch 1, para 12, as amended by the Live Music Act 2012, s 2(15). 90 Ibid, Sch 1, para 2 (1A), as inserted by art 2(3) of the Licensing Act 2003 (Descriptions of Entertainment) (Amendment) Order 2013, SI 2013/1578.

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11.19  Entertainment Provided by the Club (2)

qualifying club activities: see 9.8;

(3)

authorisations: see 9.9;

(4)

club premises certificate: see 9.10;

(5)

premises licence: see 9.37;

(6)

temporary event notice: see 9.50;

(7)

personal licence: see 9.62;

(8)

appeals: see 9.67;

(9)

fees: see 9.70.

11.19 Films: mandatory condition Where the club premises certificate or the premises licence authorises the exhibition of films, a mandatory condition must be included that the admission of children (viz those under 18 years) to the film shall be restricted in accordance with the recommendations given by the British Board of Film Censors91 or by the licensing authority itself.92 11.20 Plays: prohibited condition The licensing authority has no power to attach conditions to the club premises certificate or the premises licence which relate to the nature of the play or to the manner of its performance, unless they are justified as a matter of public safety.93 We add here that where the artistic integrity of a performance makes it appropriate for a performer to smoke, that part of the premises where the performer smokes shall not be a smoke-free place.94 11.21 Statutory guidance  As with the licensing of alcohol, the Secretary of State is under a duty to issue guidance as regards regulated entertainment95 and the licensing authority must publish its own statement of licensing policy as regards regulated entertainment.96 11.22 Statistics In 2010 16,707 members’ clubs held a club premises certificate, whereas as at 31 March 2017 10,700 such clubs held this certificate. The number of authorisations for regulated entertainment of some sort for the comparable years of 2010 and 2017 is set out below.97 The apparent discrepancy in the number of authorisations, which has remained roughly the same despite the decline in numbers of the holders of club premises certificates, can be explained by the increase of authorisations covering multiple kinds of entertainment. In addition, the Live Music Act 2012 removed regulation concerning the provision of entertainment facilities; hence there are no available statistics in 2017 for these facilities.

91 92 93 94 95 96 97

A body designated under s 4 of the Video Recordings Act 1984. Licensing Act 2003, ss 20 and 74. Ibid, ss 22 and 76. Smoke-free (Exemptions and Vehicles) Regulations 2007, SI 2007/765, reg 6. Licensing Act 2003, s 182, as amended by the Policing and Crime Act 2017, s 140. Ibid, s 5. These contain the latest statistics published by the Department for Digital, Culture, Media and Sport.

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Television licence 11.23 201098

201799

(1)

Plays

1,972

1,752

(2)

Films

2,583

2,576

(3)

Indoor sporting events

4,408

3,985

(4)

Boxing and wrestling

507

488

(5)

Live music

8,445

7,429

(6)

Recorded music

9,297

8,068

(7)

Performance of dance

4,150

3,930

(8)

Entertainment similar to live music, recorded music or dance

3,515

3,376

34,877

31,804

4,471

—

(10) Facilities for dancing

6,973

—

(11) Facilities for entertainment similar to making music or dancing

3,011

—

49,332

31,804

(9)

Facilities for making music

6.  Television licence 11.23 The club will need to obtain a television licence if it installs or uses any television receiving equipment,100 such as a television set, computer, mobile phone, games console, digital box or DVD/VHS recorder.101 The use in question will be the receiving of television programmes as they are being broadcast or through ‘catch up services’.102 The licence will relate to a specified place,103 such as the clubhouse, and thus it will cover all relevant equipment at that place which means, for example, the club can install and use two televisions under the one licence. The licence fee for colour television is set annually by the Secretary of State for Digital, Culture, Media and Sport and is currently (2020) the sum of £154.50.104 The fee is payable to the BBC105 and is collected by the corporation under its trading name of TV Licensing. Installing or using television receiving equipment without a licence is a criminal offence.106 The BBC may obtain a warrant from the magistrates’ court to enter premises where there are reasonable grounds for believing that television

98 See Department for Culture, Media and Sport, National Statistics Bulletin on Alcohol, Entertainment and Late Night Refreshment Licensing, April 2009 to March 2010 (29 October 2010) p 39. 99 Department for Digital, Culture, Media and Sport, Entertainment Licensing 2017 (27 February 2018) available on the gov.uk website. 100 Communications Act 2003, s 363(1). 101 Ibid, s  368(1) as amended by Communications (Television Licensing) (Amendment) Regulations 2016, SI 2016/704, reg 9(1). 102 Ibid, s 368 and the inserted Part 4A (viz ss 368A–368R). 103 Ibid, s 364(2)(c). 104 Communications (Television Licensing) Regulations 2004, SI 2004/692, Sch 1 as amended by Communications (Television Licensing) (Amendment) Regulations 2019, SI 2019/151, reg 3(4). 105 Communications Act 2003, s 365(2). 106 Ibid, s 363(2).

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11.24  Entertainment Provided by the Club receiving equipment has been installed or is being used without a valid licence.107 The separate radio licence was abolished in 1971. A  television licence covers all of the BBC Network, regional and local radio in the UK, with the exception of the BBC World Service. If perchance the club has no television set but only a radio on its premises, it will need no licence.

7.  Noise nuisance 11.24 This is a recurrent problem in modern society on a crowded island.108 The Environmental Protection Act  1990 allows the local authority to take action against individuals or companies who create a nuisance through pollution of some kind, and noise is now labelled a statutory nuisance, being a species of pollution.109 If a complaint is made to the local authority, the environmental health officer is bound to investigate the complaint, and will try to resolve the matter amicably. The assessment of noise nuisance is based on whether it is ‘reasonable’, bearing in mind the locality, how often the noise occurs and how many people are affected. If the local authority thinks the noise is a statutory nuisance, it will serve an abatement notice which will set out what is required for the offending neighbour, for example, if the issue is loud music the club may be asked to stop the music outright; or it may be asked to play the music between set times only; or, whenever music is played, it may be asked to fit an appropriate noise limiting device. The local authority may also pass on information about the noise complaint to its licensing committee, who could use it on any review proceedings. If the abatement notice is not complied with, this may result in a prosecution under the Act.110 An unfortunate situation can arise where a newcomer moves into a property close to the club and then complains about loud music, whereas the previous owner had never made any complaint about the club’s dances or playing of music despite having lived in the property for many years. The legal position is that the newcomer has the right to complain if on an objective basis the music amounts to noise nuisance. It is no answer at law to say that the club was there first or that the newcomer voluntarily came to the nuisance and so must accept the situation as he finds it,111 although these facts may carry weight with the local authority in deciding what action to take under the Act.112

107 Communications Act 2003, s 366. 108 Kennaway v Thompson [1981] QB 88, CA, at 94 (Lawton LJ). 109 Environmental Protection Act 1990, s 79(1)(g). 110 Ibid, s 80. If a club’s premises were to be construed as business premises, the maximum fine is £20,000: s 80(6) and see guidance on resolving neighbour disputes on the gov.uk website. 111 Sturges v Bridgman (1879) 11 Ch D 852. 112 Coventry v Lawrence [2014] UKSC 13.

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Chapter 12

Gaming and Lotteries Run by the Club

1. Introduction 12.1 Gambling is probably an inherent human trait and is now tolerated by British governments rather than prohibited: the present scheme of governmental regulation is a compromise between toleration and prohibition.1 This compromise suits the government because of the excise duties levied upon gaming and lotteries and it suits clubs because it provides a ready and welcome source of income for the club as well as pleasurable activity for the participants. Prior to 2005 the gambling legislation was a mish-mash of statutes enacted mainly in the 1960s and 1970s and was not only out of date but took no account of modern technology. The Gambling Act 2005 (‘the 2005 Act’) swept away virtually all the existing legislation on the topic. The new gambling regime laid down for clubs, however, is broadly similar in effect to the previous regime. The 2005 Act came into force in 2007 and it has 18 Parts with 18 accompanying schedules. Its objectives are threefold:2 (1) to prevent gambling from being a source of crime; (2) to ensure that gambling is conducted in a fair and open way; and (3) to protect children and other vulnerable persons from harm or exploitation by gambling. For the first time in a parliamentary Act a specific part, namely, Part 12, has been dedicated to the regulation of gaming in clubs. 12.2 Gambling is defined in the 2005 Act as meaning gaming, lotteries and betting3 and we will deal with each topic in turn. Clubs themselves have been divided into two categories, namely, members’ clubs and commercial clubs.4 Where a club needs authorisation in the form of a permit this has to be obtained from the local authority.5

1

2 3 4

5

The rigour of the earlier law is demonstrated by R v Ashton [1852] 1 El & Bl 286 (a successful appeal against conviction concerning the playing of dominoes without stakes in a public house under the gaming acts then in force which rendered all games of chance unlawful except games of pure skill). Gambling Act 2005, s 1. Ibid, s 3. As with the previous legislation, the 2005 Act specifically mentions miners’ welfare institutes as being within its ambit. These institutes are not clubs as defined in 1.1, being associations established for social or recreational purposes where the association is managed by a group of miners’ representatives or where it uses premises which are regulated under a charitable trust: Gambling Act 2005, s 268. Ibid, s 2, thus copying the regime under the Licensing Act 2003.

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12.3  Gaming and Lotteries Run by the Club 12.3 Clubs defined A  members’ club: (1) must have at least 25 members; (2) must be established and conducted for the benefit of its members; (3) must be established and conducted wholly or mainly for purposes other than gaming (unless the gaming is of the prescribed kind, namely, bridge and whist6); and (4) must not be operating on a temporary basis.7 A commercial club is subject to the same conditions save that the second condition does not apply.8 These clubs are called proprietary clubs in this book. It is to be noted that the Gambling 2005 Act uses a different definition of a club from that used in the Licensing Act 2003.9 12.4 Children defined A child means a person who is less than 16 years old.10 A  young person means a person who is less than 18 years old but who is not a child.11 12.5 The Gambling Commission There is a regulatory body called the Gambling Commission12. The Commission is under a statutory duty to issue Codes of Practice13 concerning the manner in which facilities for gambling are provided. It must also issue Guidance14 to local authorities as to the manner in which they are to exercise their functions under the 2005 Act. By utilising its power to impose conditions on operating licences15 in conjunction with the publication of Codes of Practice and Guidance, the Commission has achieved a degree of control over gambling in the UK which may not have been envisaged by Parliament when it passed the 2005 Act. This magisterial stance is reflected in the judgment of the First-Tier Tribunal in Luxury Leisure Ltd v Gambling Commission when the tribunal said in its Decision, ‘it is open to the Commission to attach conditions concerning what [the tribunal] might call the atmosphere in which various [gambling] facilities are made available’.16 Generally speaking, clubs should take note of the Gambling Commission’s Gambling Codes of Practice consolidated for all forms of gambling, 2020.17 In particular, clubs should study the Guidance to Licensing Authorities, Part 25 entitled ‘Clubs’.18

2.  Gaming: an overview 12.6 Gaming is statutorily defined as ‘the playing of a game of chance for a prize’.19 This excludes games of pure skill such as chess or draughts. A  game of chance includes one which involves both chance and skill (such as bridge, whist, 6

Gambling Act 2005 (Gaming in Clubs) Regulations 2007, SI 2007/1942, reg 2. Curiously, backgammon is not prescribed even though it is an equal-chance game of great antiquity and backgammon clubs do exist. 7 Gambling Act 2005, s 266. 8 Ibid, s 267. 9 See 9.11. 10 Gambling Act 2005, s 45(1). 11 Ibid, s 45(2). 12 Ibid, s 20. 13 Ibid, s 24. 14 Ibid, s 25. 15 Ibid, s 75. 16 [2015] LLR 122, at [24]. 17 Updated to January 2020, available from the Gambling Commission’s website. 18 5th edition, published in September 2015. 19 Gambling Act 2005, s 6(1).

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Exempt equal-chance gaming 12.10 backgammon or poker) but it does not include a sport.20 A person plays a game of chance whether or not he risks losing anything at the game.21 A prize means money or money’s worth and includes both a prize provided by a person organising the gaming and the winnings of money staked.22 12.7 Equal-chance gaming does not involve playing or staking against a bank, such as in roulette, and the chances must be equally favourable to all participants.23 Roulette is a good example of an unequal-chance game because the croupier’s wheel has a green ‘0’ where no player wins, to the obvious advantage of the bank. It matters not whether the bank is controlled or administered by a player.24 12.8 The 2005 Act starts off with the proposition that all gaming is unlawful unless it is run in accordance with a licence (eg  a casino operating licence or a bingo operating licence) or it constitutes exempt gaming.25

3.  Exempt equal-chance gaming 12.9 Exempt gaming is generally admissible in any club. Such gaming must be equal-chance gaming and be ancillary to the purposes of the club,26 unless the gaming is restricted to that of a prescribed kind (currently bridge and whist).27 The Gambling Act 2005 authorises members’ clubs to provide facilities for equalchance gaming without the need to obtain further authorisation under the Act, provided the club complies with the conditions set out in section 269 of the Act. Members’ clubs must be permanent in nature and have at least 25 members but there is no need for a club to have an alcohol licence.28 Members’ clubs are not subject to gaming duty under their exempt gaming activities.29 The exemption includes such games as backgammon, bingo, cribbage, dominoes, kalooki, mah-jong, poker and rummy. 12.10 Conditions To qualify for this exemption under Part 12 of the 2005 Act the club must comply with the following conditions: (1)

20 21 22 23 24 25 26 27 28 29 30

the facilities must be for equal-chance gaming;30

Gambling Act 2005, s 6(2). Ibid, s 6(4)(a). Ibid, s 6(5). Ibid, s 8(2). Ibid, s 8(2)(a). This statutory provision negates the argument that if the position of banker can be won or lost, or the position of banker circulates amongst the players, one can convert a game of unequal chance into a game of equal chance. Ibid, s 33. See Gambling Commission’s Code of Practice for Equal Chance Gaming in Clubs, Provision 1.2 (August 2014). Gambling Act 2005, ss 266(2)(a) and 267(2)(a); and the Gambling Act 2005 (Gaming in Clubs) Regulations 2007, SI 2007/1942. Gambling Commission’s Code of Practice for Equal Chance Gaming in Clubs, Provision 25.4 (August 2014). Finance Act 1997, s 10(3B), (3C), (4) and (5) and Gambling Act 2005 (Gaming in Clubs) Regulations 2007, SI 2007/1942, reg 2. Gambling Act 2005, s 269(1).

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12.11  Gaming and Lotteries Run by the Club (2)

the following participation fees31 apply where the club does not hold a club gaming permit:32 (a) a maximum of £18 for the games of bridge or whist where no other gaming facilities are provided by the club on that day; (b) in all other cases, a maximum of £1 if the club is a members’ club; (c) in all other cases, a maximum of £3 if the club is a commercial club which holds a club machine permit;

(3)

the following rules apply to the game of poker:33 (a) a player’s stake for any one game must not exceed £10; (b) a player’s stakes for any one day must not exceed £250; (c) a player’s stakes for any one week must not exceed £1,000; (d) the prize for any one game must not exceed £250;

(4) no amount is deducted or levied by the club or the person providing the gaming facilities from the sums staked or won;34 (5)

a game played on one set of premises must not be linked with a game played on another set of premises (as sometimes happens in bingo);35 a person may only participate in the gaming if he is a member of the club who became a member, or was nominated for membership, at least 48 hours before he participates.36 This condition does not apply to commercial clubs.37

12.11 Code of Practice The detailed Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence was issued by the Gambling Commission in August 2014 and updated to October 2018 pursuant to section 24 of the Gambling Act 2005. It may be found on the Commission’s website referred to in 12.5. We draw attention to the following: (1)

there are different provisions for clubs with or without alcohol licences;

(2) compliance with the Code is the responsibility of the designated premises supervisor (if the club holds an alcohol licence) or a nominated person (if no alcohol licence). The designated person should ensure a pleasant atmosphere and deny unruly participation during the gaming;38 (3)

procedures should be in place to prevent under-age gambling;

(4)

the club rules should be on display;

(5)

records should be kept of paid club subscriptions and of participation fees.

31 A member’s subscription does not count as a participation fee nor does any stake count as one: ibid, s 344(1)(c)–(d). 32 Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007, SI 2007/1944, reg 4. 33 Ibid, regs 2 and 3. 34 Gambling Act 2005, ss 269(3) and 270(3). 35 Ibid, ss 269(5) and 270(5). 36 Ibid, s 269(6)(a). 37 Ibid, s 269(6). 38 Gambling Commission’s Code of Practice for Equal Chance Gaming in Clubs, Provision 1.9 (August 2014).

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Non-commercial equal-chance gaming 12.14 12.12 Prize gaming Part  13 of the 2005 Act authorises prize gaming. Prize gaming means that neither the nature nor the size of a prize played for is determined by reference to the number of players or the amount of the stakes.39 This is a type of gaming where the organiser puts up the prizes in advance as distinct from gaming where the stakes of the participants make up the winnings. The definition of gaming in Part 1 covers any sort of gaming for prizes or winnings. Therefore, a provision in the 2005 Act which generally authorises gaming authorises prize gaming. It is a moot point whether exempt equal-chance gaming in clubs includes prize gaming. 12.13 Conditions This gaming is subject to the following conditions: (1) the chance to participate in a particular game must be acquired or gaming allocated on one day and in the place where the game is played;40 (2)

the game must be played entirely on that day;41

(3) the participation fee charged for any one chance to win a prize in a game must not exceed £1, even if the chance provides the opportunity to win more than one prize;42 (4) the aggregate amount of the participation fees charged for any one chance to win a prize in a game must not exceed £500;43 (5)

the limit for any one prize is £70 in money or value;44

(6)

the aggregate of the prizes must not exceed £500 in money or value;45

(7)

the result of the game must be made public where the game is played and as soon as reasonably practicable after the game is played and, in any event, on the day in which it is played;46

(8)

participation in prize gaming shall not entitle the player to participate in any other gambling.47

4.  Non-commercial equal-chance gaming 12.14 Part 14 of the 2005 Act contains an important addition to the exempt regime in that it exempts the club from the need to obtain any authorisation for equal-chance gaming and prize gaming where they take place at a non-commercial

39 40 41 42

43 44 45 46 47

Gambling Act 2005, ss 288, 293(3)(a). Ibid, s 293(3)(a). Ibid, s 293(3)(b). Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009, SI 2009/1272, reg 2(1) (a) and (2). For example, in a game of bingo the purchase of one game card (the chance) may provide the player with three distinct opportunities to win a prize (one line, two lines, full house). The maximum fee remains at £1 because the game card constitutes a single chance to win one or more of several prizes. Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009, SI 2009/1272, reg 2(1)(b). Ibid, reg 3(1)(a) and 3(2)(a). Ibid, reg 3(1)(b) and 3(2)(b). Gambling Act 2005, s 293(3)(c). Ibid, s 293(5).

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12.15  Gaming and Lotteries Run by the Club event.48 The Act defines a non-commercial event as one where no part of the proceeds49 is appropriated for the purposes of private gain,50 which means that to take advantage of this exemption all of the proceeds must be utilised for charitable purposes or for purposes benefiting the club as a whole. This type of gaming does not necessarily have to take place on club premises. So a club’s whist drive or bingo session held at the local village hall to raise funds for the club would come within the ambit of this exemption. Equal-chance gaming also includes games such as poker or bingo because the chances are equally favourable to all participants and players are not competing against a bank. 12.15 Private gain Section 353(1) of the 2005 Act says that private gain is to be construed in accordance with s 19(3). Rather oddly this latter section gives no definition of private gain but simply describes a particular scenario which does not amount to private gain. To understand this oddity we need to go back to the case of Payne v Bradley.51 There the receipt by a working men’s club of the proceeds of bingo sessions organised by the club to meet its general expenses of maintaining the club was held by the House of Lords to be a private gain to the club and its members, and therefore illegal under the then gaming laws. This decision was reversed by the Gaming Act 1968 and the reversal is continued under the 2005 Act. Section 19(3) states that there is no private gain despite the fact one or more individuals obtain a benefit from the gaming in question,52 provided this benefit occurs in the course of the activities of a non-commercial society. A non-commercial society is one which, as its name suggests, is established and conducted for charitable purposes or for non-commercial purposes (including participation in or support of sport, athletics and cultural activities).53 The 2005 Act requires that both the money raised from the non-commercial event and the profits made from the gaming itself are not used for private gain. This means that if someone other than the club provides the facilities for gaming, they too must ensure that their profits go to good causes. On the other hand, persons not concerned with the gaming, such as caterers or suppliers of refreshment, are not caught by the no-private-gain rule. 12.16 Conditions for non-commercial equal-chance gaming This gaming must comply with the following conditions in club activity: (1) participants are informed that the purpose of the gaming is to raise money for a specified purpose;54 (2) no profits from the gaming are applied to private gain.55 Profits means the amount of the stakes together with moneys accruing to the organiser of

48 This mirrors the earlier legislation, namely, gaming at exempt entertainments under s 41 of the Gaming Act 1968 and amusements with prizes at exempt entertainments under s 15 of the Lotteries and Amusements Act 1976. Lotteries at exempt entertainments under s 3 of the 1976 Act are now covered by incidental lotteries (see 12.44). 49 The ‘proceeds’ are defined as the sums raised by the organisers minus reasonable expenses: Gambling Act 2005, s 297(3) 50 Ibid, s 297(2) 51 [1962] AC 343. 52 Eg because they are members of the club which is the beneficiary of the profits of the gaming. 53 Gambling Act 2005, s 19(1). 54 Ibid, s 300(2). 55 Ibid, s 300(3).

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Non-commercial equal-chance gaming 12.19 the gaming minus the cost of prizes and other costs reasonably incurred in organising or providing facilities for the gaming;56 (3)

the gaming must comply with the following rules: (a) the participation fee must not exceed £8 for any one game played at an event;57 (b) the aggregate amount or value of the prizes in respect of all the games played at an event must not exceed £600;58 (c) where two or more events are promoted on the same premises by the same person on the same day, the limits referred to in (a) and above shall apply;59 (d) where a series of events other than described in (c) above takes place, the same limits apply, save that in respect of all the games played at the final event60 the amount or value of the prizes may be increased up to £900;61

(4)

the gaming is non-remote.62

12.17 Conditions for non-commercial prize gaming This gaming must comply with the same conditions as laid down for non-commercial equal-chance gaming (see 12.16) except for the third condition, which does not apply.63 12.18 Race nights These provide a useful example of how the exemption works in practice. In a race night the selection of the ‘horse’ to bet on is entirely dependent on chance. Often archive film is used without revealing the details of the race. A race night can be staged: (a) as non-commercial equal-chance gaming where the chances are equally favourable to all participants and the players are not competing against a bank; or (b) as non-commercial prize gaming where the prizes are advertised in advance and do not depend on the number of people playing or the amount of the stakes (here the outcome of the ‘race’ determines the winner of the prize); or (c) as an incidental lottery where the race night is not the only or main purpose of the non-commercial event (see 12.44). 12.19 Gambling Commission advice If clubs need to peruse the Commission’s detailed Advice on Non-Commercial and Private Gaming and Betting issued in June 2016, this can be found on the Commission’s website referred to in 12.5.

56 Gambling Act 2005, s 300(8). 57 Gambling Act  2005 (Non-Commercial Equal-Chance Gaming) Regulations  2007, SI 2007/2041, reg 3(2). 58 Ibid, reg 3(3). 59 Ibid, reg 3(4). 60 For there to be a final event, every player must have taken part in an earlier game of the series held on a previous day: ibid, reg 3(6). 61 Ibid, reg 3(5). 62 Gambling Act 2005, s 300(7). Remote gambling means gambling in which the participants use remote communication, including the internet, telephone, television or radio: ibid, s 4. Remote gambling requires a remote gambling licence under ibid, s 89. 63 Ibid, s 299.

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12.20  Gaming and Lotteries Run by the Club

5.  Gaming machines 12.20 A  gaming machine is statutorily defined as being a machine which is designed or adapted for use by individuals to gamble, whether or not it can be used for other purposes.64 Making a gaming machine available for use on club premises is an offence unless it is covered by the requisite exception, permit or licence.65 Under the 2005 Act there are designated four classes of gaming machine, known as Categories A to D, with Category B being divided into five sub-categories.66 The categories are defined as follows:67 (1)

Category A: (not applicable to clubs);

(2) Category B: B1/B2/B3: (not applicable to clubs); B3A: it enables a person to participate in a lottery but not in any other form of gambling; it is made available for use by a members’ club; the maximum charge for use is £2; the maximum prize value is £500; it does not fall within Category B4 nor within Category C or D; B4: the maximum charge for use is £2; the maximum prize value is £400; it is not a Category C or D machine; (3)

Category C: the maximum charge for use is £1, the maximum prize value is £100; it is not a Category D machine;

(4) Category D: money-prize machine: the maximum charge for use is 10 pence; the maximum prize value is £5; non-money prize machine: the maximum charge for use is 30 pence; the maximum prize value is £8; crane grab machine: the maximum charge for use is £1; the maximum prize value is £50; coin pusher machine: the maximum charge for use is 20 pence; the maximum prize value is £20, of which no more than £10 may be a money prize; penny fall machine: the same as for a coin pusher machine; other machines: a machine is a Category D machine if the maximum charge for use is 10 pence and the maximum prize value is £8, of which no more than £5 may be a money prize. 12.21 Exception: no-prize gaming machine A  club commits no offence under the Act if it provides a gaming machine on the club premises which by its use does not give the individual the opportunity to win a prize.68 The well-known

64 Gambling Act 2005, s 235(1). This wide definition has meant that the 2005 Act has had to exclude various machines from the definition, such as a croupier’s roulette wheel or a lottery ticket machine: see s 235(2). 65 Ibid, s 242. 66 Ibid, s 236. 67 Categories of Gaming Machine Regulations 2007, SI 2007/2158 (as amended). 68 Gambling Act 2005, s 248(1)(b).

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Club machine permit 12.24 mechanical football game69 which has two, and sometimes four, players at the controls is a gaming machine which comes into this category. Although put as an exception to the gaming machine regime, it is not a true exception because there is no element of gambling involved. Such machines are therefore not subject to any statutory control. 12.22 Exception: limited-prize gaming machine A  club commits no offence under the 2005 Act if it provides a gaming machine on the club premises which by its use does not give the player the opportunity to win a prize in excess of the amount which he paid in order to use the machine.70 These machines are sometimes known as play-again machines. Pinball71 and video-game machines come into this category. These machines are true gaming machines but need no express authorisation.

6.  Club machine permit 12.23 A members’ club and a commercial club may apply under Part 12 of the 2005 Act for this permit which authorises the holder to offer: (a)

equal-chance gaming; and

(b) provide up to three gaming machines for use on club premises within Categories B3A, B4, C or D but only one machine in category B3A.72 12.24 Conditions The permit is subject to the following conditions: (1)

a person may only use the machine if he is a member of the club who became a member, or was nominated for membership, at least 48 hours before he uses the machine;73

(2)

a person who is the guest of a member may use the machine provided that he is a genuine guest, that is to say, he will not be treated as a guest if the member extending the invitation has no previous acquaintance with that person and invites him solely for the purpose of enabling him to take advantage of the gaming facilities;74

(3)

no child or young person may use a Category B or C gaming machine on the club premises;75

(4)

the holder of the permit must comply with any code of practice issued by the Gambling Commission concerning the location and operation of a gaming machine.76

69 At one time it was seen in a great many French cafés. 70 Gambling Act 2005, s 249(1)(b). 71 Modern pinball machines emanate from the famous ‘bagatelle’ game invented at the Chateau de Bagatelle in France in the 18th century and played there by Louis XVI. 72 Gambling Act 2005, s  273(2)(a); Categories of Gaming Machine Regulations  2007, SI 2007/2158, reg 6(4). 73 Ibid, s 273(3)(a). 74 Ibid, s 273(5). 75 Ibid, s 273(4)(a). 76 Ibid, s 273(4)(b).

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12.25  Gaming and Lotteries Run by the Club

7.  Club gaming permit 12.25 A members’ club, but not a commercial club, may apply under Part 12 of the 2005 Act for this permit to authorise on the club premises the provision of: (a) games of chance; and (b) gaming machines.77 This allows clubs to offer gaming facilities in addition to those available under the exempt gaming provisions.78 The permit authorises the club to offer:79 (1)

equal-chance gaming such as poker or bingo;80

(2) games of chance: pontoon and chemin de fer only (it should be noted that the regulations exclude the game of blackjack and any version of pontoon which does not allow the bank to pass among the players);81 (3) up to three gaming machines, which must be within Categories B3A, B4, C or D but only one machine of B3A.82 12.26 Conditions The permit is subject to the following conditions: (1)

there is no limit on stakes or prizes, except bingo where there is a stakes and prizes limit of £2,000 in any seven-day period;83

(2)

there is a limit on participation fees:84 (a) £20 (exclusive of VAT) per person per day for bridge and/or whist (if no other kind of gaming is provided by the club); (b) £3 (exclusive of VAT) per person per day for other gaming (including poker);

(3) no amount is deducted or levied by the club or the person providing the gaming facilities otherwise than in accordance with regulations;85 (4) the public are excluded from any area where gaming is taking place.86 The public means persons other than the members and their guests, the club staff and the persons providing the facilities;87 (5) a person may only participate in the gaming if he is a member of the club who became a member, or was nominated for membership, at least 48 hours before he participates;88

77 Gambling Act 2005, s 271(2)(a). 78 This part of the text is based on the Gambling Commission’s Guidance to Licensing Authorities, Part 25 entitled ‘Clubs’, 5th edition, published in September 2015. 79 Gambling Act 2005, s 271(3). 80 Ibid, s 269, and see the Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007, SI 2007/1944. 81 Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007, SI 2007/1945. reg 2(2). 82 Categories of Gaming Machine Regulations 2007, SI 2007/2158 (as amended), reg 6(4). 83 See the Gambling Commission’s Guidance referred to in footnote 78, para 25.7. 84 Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007, SI  2007/1945, reg  3(2). A  day means a period of 24 hours beginning at midday: ibid, reg 3(3). 85 Gambling Act 2005, s 271(4)(b). 86 Ibid, s 271(4)(c). 87 Ibid, s 272(2). 88 Ibid, s 271(6)(a).

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Procedure for obtaining club permits 12.28 (6) a person who is a guest of a member may participate in the gaming89 provided that he is a genuine guest, that is to say, he will not be treated as a guest if the member extending the invitation has no previous acquaintance with that person and invites him solely for the purpose of enabling him to take advantage of the gaming facilities;90 (7)

children and young persons are excluded from any area where the gaming is taking place;91

(8)

no child or young person may use a Category B or C gaming machine on the club premises;92

(9)

the holder of the permit must comply with any code of practice issued by the Gambling Commission concerning the location and operation of a gaming machine.93

8.  Procedure for obtaining club permits 12.27 Schedule  12 to the 2005 Act contains detailed rules concerning the obtaining and regulation of club machine permits and club gaming permits. It should perhaps be noted that a club does not need an alcohol licence to apply for a club permit, although the two commonly go hand-in-hand. 12.28 Application94 The club applies to the licensing authority in whose area the club premises are situated. A  copy of the application must be sent to the Gambling Commission and to the local Chief Officer of Police. The authority must refuse the application if the applicant is not a club as defined; The authority may refuse the application if: (a)

the club premises are wholly or mainly used by children or young persons.95

(b)

an offence under the Act or a breach of a permit has been committed by the club when providing gaming facilities;

(c)

a permit held by the club has been cancelled within the previous 10 years;

(d)

an objection has been lodged by the Commission or the police. If an objection is lodged, a hearing will take place unless all parties agree otherwise. Reasons must be given for rejecting the application.

89 90 91 92 93 94

Gambling Act 2005, s 271(6)(b). Ibid, s 272(4). Ibid, s 271(4)(d). Ibid, s 271(7)(a). Ibid, s 271(7)(b). Ibid, Sch  12, paras  1–9; see also Gambling Act  2005 (Club Gaming and Club Machine Permits) Regulations  2007, SI  2007/1834, as amended by Gambling Act  2005 (Club Gaming and Club Machine Permits) (Amendment) Regulations 2007, SI 2007/2689. 95 Ibid, Sch  12, para  6(1)(b). The ground of refusal is expressed as discretionary, but it is difficult to envisage circumstances in which premises used wholly or mainly by children can properly be granted a permit. See also the grounds for cancellation: para 21(1)(a).

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12.29  Gaming and Lotteries Run by the Club 12.29 Fast-track application96 Where the applicant is the holder of a club premises certificate under the Licensing Act  2003 there is no opportunity for objections to be made, and the grounds for rejection are limited to ground (d) above and/or the fact that the club is established or conducted for the purposes of gaming other than that which is prescribed. The reason for this provision is that the club will already have been through the licensing process in relation to its club premises certificate under the 2003 Act and to impose the full requirements of Schedule 12 would be an unnecessary duplication. 12.30 Form of permit97 The permit is in a prescribed form and the licensing authority maintains a register of permits. The club must keep the permit on the club premises. If the information in the permit ceases to be accurate the club must apply to have the permit varied. If the permit is lost or damaged the club may apply for a copy, for which a fee is payable. If the permit is lost or stolen, the club must report this fact to the police. 12.31 Duration and renewal98 A permit will last for 10 years and can then be renewed. A renewal application can be made no earlier than three months before the end of the 10-year period and no later than the start of the last six weeks of that period. On renewal the licensing authority has available the same grounds of refusal as set out in 12.28. Where the permit was granted under the fast-track procedure, the permit lasts indefinitely until such time as the club premises certificate comes to an end. If the club as holder ceases to be a members’ club or a commercial club, the permit shall lapse. The club may also surrender the permit by giving notice to the licensing authority. 12.32 Cancellation99 The licensing authority may cancel a permit if it thinks that the club premises are used wholly or mainly by children and/or young persons or that an offence, or a breach of a condition of the permit, has been committed in the course of gaming activities carried on by the club. The licensing authority must give the club at least 21 days’ notice of its intention to consider cancellation of the permit and consider any representations made by the club; a hearing will be held if the club requests one. The authority shall cancel the permit if the club fails to pay the annual fee, unless the failure was attributable to administrative error. 12.33 Forfeiture100 Where a club or one of its officers is convicted of an offence under the Act, the court may order the forfeiture of the permit. Forfeiture may be suspended while an appeal is being brought against the conviction or against any order made on the conviction. It is for the court to notify the licensing authority of the order for forfeiture. 12.34 Appeals101 Where the licensing authority rejects an application for the issue or renewal of a permit or where it cancels the permit, the club may appeal to the local magistrates’ court within 21  days of the receipt of the decision. An unsuccessful objector to the issue or renewal of a permit has a similar right of appeal. 96 Gambling Act 2005, Sch 12, para 10. 97 Ibid, Sch 12, paras 11–16 and 26. 98 Ibid, Sch 12, paras 17–20 and 24. 99 Ibid, Sch 12, paras 21 and 22. 100 Ibid, Sch 12, para 23. 101 Ibid, Sch 12, para 25.

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Gaming: a miscellany 12.37 12.35 Fees The fee payable for an application for a permit is £200 unless the club holds a club premises certificate, in which case it is £100.102 On a renewal application, the same scale of fees applies.103 After issue of the permit a first annual fee of £50 is payable and thereafter a further annual fee of £50 is payable.104 12.36 Inspection of premises Part 15 of the 2005 Act deals with the inspection of premises in connection with gambling activities.105 As far as members’ clubs are concerned, an authorised local authority officer may enter the club premises in respect of which an application has been made for: (a) a club gaming permit; or (b) a club machine permit, for a purpose connected with the consideration of that application.106 Furthermore, a constable or enforcement officer107 may enter club premises to determine whether any gaming which is taking place, or about to take place, is doing so in accordance with the conditions laid down for exempt equalchance gaming or is in accordance with its club gaming permit or its club machine permit.108

9.  Gaming: a miscellany 12.37 Bingo in members’ clubs Under the 2005 Act bingo means any version of the game by whatever name it is described.109 As with the Gaming Act 1968, the 2005 Act nowhere describes what bingo is. It is a game of equal chance played between a number (often a large number) of players. Each player is given a card with a series of numbers on it. The person in charge draws out of a bag or a special box (the tombola) a random number, or the number may be selected mechanically or electronically. The number is called out or displayed and if it corresponds to a number on the card, the player crosses out that number. The first person to cross out all or certain of the numbers makes known his completion and wins a prize. The game is generally now called bingo but is also known by the name of housey-housey or tombola.110 Bingo is a game of equal-chance and counts as exempt gaming provided: (a) it complies with the conditions set out in 12.10; and (b) it does not amount to ‘high turnover bingo’ played during a ‘high turnover period’,111 that is to say, where the total stakes or prizes for bingo games played at the club during any one period of seven days exceed £2,000 in the course of one year beginning with the first day of the seven-day period.112 If this limit is exceeded, the club must inform the Gambling Commission of this occurrence as soon as reasonably practicable.113 The club must obtain a bingo operating licence under section 65(2) (b) of the 2005 Act before any further high turnover bingo takes place during that

102 Gambling Act  2005 (Club Gaming and Club Machine Permits) Regulations  2007, SI 2007/1834, reg 8(1). 103 Ibid, reg 8(2). 104 Ibid, regs 12, 13 and 14. 105 See also Gambling Act  2005 (Inspection) (Provision of Information) Regulations  2007, SI 2007/319. 106 Gambling Act 2005, s 312(4). 107 Ie an employee or authorised agent of the Gambling Commission: ibid, s 303(1)–(2). 108 Ibid, s 312(1)–(3). 109 Ibid, s 353(1). 110 Payne v Bradley [1962] AC 343, at 354. 111 Gambling Act 2005, ss 269(1) and 275(1). 112 Ibid, s 275(2), (3), (4). 113 Ibid, s 275(6).

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12.38  Gaming and Lotteries Run by the Club year.114 There is one dispensation if the club applies for such a licence: there is no requirement for a personal licence holder which would otherwise apply.115 Bingo may also be played as non-commercial equal-chance gaming (see 12.14) or it may take place as an incidental lottery (see 12.44). It should be noted that small-scale bingo played in members’ clubs has been exempt from bingo duty since 1992.116 12.38 Temporary use notice Where an operating licence holder wishes to provide facilities for gambling temporarily on premises, he may give notice in writing (a ‘temporary use notice’) that he intends to use the premises for the provision of gambling.117 It is rare for clubs to be the holders of an operating licence (an exception might be a large bingo club). The 2005 Act contemplates that premises which would normally be the subject of a temporary use notice are hotels, exhibition centres, entertainment venues and suchlike.

10.  Lotteries: an overview 12.39 Under the Gambling Act 2005, a lottery is defined either as a ‘simple lottery’ or a ‘complex lottery’. A simple lottery is any arrangement whereby prizes are allocated by a process, which relies wholly on chance, to individual persons or to members of a class of persons who are required to pay in order to participate in the arrangement.118 A complex lottery is any arrangement whereby prizes are allocated by a series of processes, the first of which relies wholly on chance, to individual persons or to members of a class of persons who are required to pay in order to participate in the arrangement.119 Thus if any merit or skill is involved in determining the distribution of prizes, this is not a simple lottery120 but may well be a complex lottery. So a competition to guess the number of sweets in a jar or the weight of a pig is not a lottery. In the same vein neither the forecasting of the result of football matches121 nor a competition to forecast the first four horses in a race122 amounts to a lottery. On the other hand, it may safely be assumed that a club raffle (where one or more articles are distributed by lot) or a club sweepstake (where participants’ stakes are pooled and horses or teams, etc. are assigned by lot and prizes are awarded on the outcome of an event) will be a lottery. 12.40 The clarity of the statutory definition is clouded by a further stipulation that a process which requires persons to exercise skill or judgement or to display knowledge shall be treated as relying wholly on chance if the process cannot reasonably be expected to prevent a significant proportion of persons lacking such skill, judgement or knowledge from participating in the lottery and/or winning

114 Gambling Act 2005, s 275(1). 115 Ibid, s 80(9). 116 Betting and Gaming Duties Act  1981, Sch  3, para  2, as amended by Finance (No  2) Act  1992, s  7(2). Small-scale bingo means that, on any one day, the winnings and the aggregated stakes do not exceed £500 or, within any one accounting period, the winnings and the aggregated stakes do not exceed £7,500: see the said Sch 3 (as amended). 117 Gambling Act 2005, Part 9 (ss 214–234) governs this topic. 118 Ibid, s 14(1), (2). 119 Ibid, s 14(3). 120 DPP v Bradfute and Associates Ltd [1967] 2 QB 291, at 295 (Lord Parker LCJ). 121 Moore v Elphick [1945] 2 All ER 155. 122 Stoddart v Sagar [1895] 2 QB 474.

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Incidental lottery 12.44 prizes therein.123 We consider that a significant proportion means a number worthy of note, that is to say, more than a minimal number but less than a substantial number. In News of the World v Friend124 the House of Lords held that a ‘spot the ball’ competition in a newspaper was not unlawful as a lottery because of the skill required by the readers to put the ball in its most logical position, which was not necessarily its historical position. We surmise that today such a competition would be categorised as a lottery, although for VAT purposes it has been held to be a ‘game’.125 12.41 Continuing with the statutory definition, a prize includes any money, articles or services.126 This is so whether or not the prize consists wholly or partly of moneys which have been paid, or articles or services which have been provided, by members of the class amongst whom the prize is allocated.127 As to payment to participate in the lottery, any requirement to pay in order to discover whether a prize has been won or to take possession of a prize which has been allocated is treated as a payment to participate.128 12.42 The promotion of lotteries129 is unlawful unless the lottery is of a type that is specifically permitted under the 2005 Act. There are two permitted types, namely, a lottery which is run in accordance with a licence under Part 5 (called a lottery operating licence) or it is an exempt lottery under Schedule 11. There are four exempt lotteries under this schedule, three of which are likely to be used by clubs rather than a licensed lottery. 12.43 Exempt lotteries The three exempt lotteries are as follows: (1)

incidental lottery;

(2)

private society lottery;

(3)

small society lottery.

11.  Incidental lottery 12.44 With effect from 6 April 2016 the re-named ‘incidental lottery’ (previously called an ‘incidental non-commercial lottery’) can be held at both non-commercial and commercial events in order to raise money for charities and other good causes but it cannot be operated for private or commercial gain. For example, an acceptable lottery for a club might be a raffle which takes place at the club’s annual-dinner dance held at a local hotel.130

123 Gambling Act 2005, s 14(5). 124 [1973] 1 WLR 248. 125 In IFX Investment Co Ltd v Revenue and Customs Commissioners [2016] EWCA Civ 436 it was held that the question of whether such a competition was a game for VAT purposes was a matter of fact and an appellate court would not interfere with the fact-finder’s decision. 126 Gambling Act 2005, s 14. 127 Ibid, s 14(4)(b). 128 Ibid, Sch 2, paras 6 and 7. 129 What amounts to promotion is spelt out in detail in ibid, s 252. 130 Gambling Act 2005, Sch  11, as amended by the Legislative Reform (Exempt Lotteries) Order 2016, SI 2016/124.

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12.45  Gaming and Lotteries Run by the Club 12.45 Conditions The terms on which such a lottery may be promoted are as follows: (1) it must be ‘incidental’, that is to say, the lottery is a minor or subordinate event to the main event;131 (2)

it must be promoted wholly for a purpose other than that of private gain;132

(3) from the proceeds of the lottery the promoters may deduct no more than £500 in respect of the costs of prizes133 and no more than £100 in respect of costs incurred in organising the lottery;134 (4) there must be no rollover.135 A rollover means an arrangement whereby the fact that a prize is not allocated or claimed in one lottery increases the value of the prizes available for allocation in another lottery;136 (5)

no lottery ticket may be sold or supplied except on the premises where and while the event is taking place;137

(6)

the results of the lottery can be made public during or after the event.138

12.46 Exception The promotion of this type of lottery shall not constitute a licensable activity under the Licensing Act 2003 by reason only that one or more of the prizes in the lottery or raffle consist of or include alcohol, provided the alcohol is in a sealed container.139

12.  Private society lottery 12.47 A club which is established or conducted for purposes unconnected with gambling may promote a private society lottery if it is authorised in writing by the club’s governing body and provided that each person to whom a ticket is sold (who may be a child or young person140) is either a member of the club or the sale takes place on the club premises.141 Thus the word ‘private’ signifies that this is a lottery which excludes outsiders. This lottery is, however, of a more ambitious nature than the incidental lottery described above. 12.48 Conditions The terms on which such a lottery may be promoted are as follows:

131 The 2005 Act does not define the word ‘incidental’ but neither did s 3 of the Lotteries and Amusements Act 1976 in legislating for ‘small lotteries incidental to exempt entertainments’. 132 Gambling Act 2005, Sch 11, para 5. See 12.15 as to the definition of private gain. 133 Ibid, Sch  11, para  3; Gambling Act  2005 (Incidental Non-Commercial Lotteries) Regulations 2016, SI 2016/239, reg 2(2). 134 Gambling Act 2005, Sch 11, para 4; the said 2016 Regulations, reg 2(3). 135 Ibid, Sch 11, para 6. 136 Ibid, s 256(1). 137 Ibid, Sch 11, para 7(1). 138 Ibid, Sch  11, para  7(2) required the results to be made public during the event but this obligation was removed by the Legislative Reform (Exempt Lotteries) Order 2016, SI 2016/124, articles 1(1) and 2(f). 139 Licensing Act 2003, s 175, as substituted by Gambling Act 2005, Sch 16, para 20. 140 See Gambling Act 2005, s 56(1)(b). 141 Ibid, Sch 11, para 10.

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Small society lottery 12.50 (1)

the lottery may be promoted for any of the purposes for which the society is conducted or any other purpose other than private gain;142

(2) no advertisement for the lottery may be displayed or distributed except on the society’s premises, or sent to any other premises;143 (3)

promotion may only be by way of a ticket sold or supplied by the promoter of the lottery. The rights conferred by a ticket are not transferrable;144

(4) the price for each ticket must be the same and must be paid to the society before any person is given the ticket or any right in respect of membership of the class among whom prizes are to be allocated;145 (5) there must be no rollover.146 Where, however, the prizes in a lottery are allocated by means of more than one draw (a common feature of this type of lottery in clubs), these draws will constitute a single lottery if the class of persons among whom the prizes are allocated remains the same.147

13.  Small society lottery 12.49 The adjective ‘small’ qualifies the word ‘lottery’, not the word ‘society’. This lottery has to be distinguished from a large lottery where the aggregate of the club’s proceeds from its proposed lotteries exceeds £250,000 during a calendar year.148 The small society lottery is of wider ambit than the private society lottery described above because members of the public may participate and it is therefore hedged about with more restrictions or conditions. Hence, unlike incidental lotteries and private society lotteries, this type of lottery requires registration with the local authority. 12.50 Conditions The terms on which such a lottery may be promoted are as follows: (1)

the lottery is being promoted by a non-commercial society,149 for example, a members’ club as defined in the 2005 Act;150

(2) the lottery is deemed to be a small lottery unless it constitutes a large lottery;151 (3)

the lottery may be promoted for any of the purposes for which the society is conducted;152

142 Gambling Act 2005, Sch 11, para 13(1), as amended by the said Legislative Reform Order 2016, article 3(a). 143 Ibid, Sch 11, para 14. 144 Ibid, s 253 and Sch 11, paras 15 and 16(2). 145 Ibid, Sch 11, para 18 as amended by Legislative Reform (Exempt Lotteries) Order 2016, SI 2016/124, article 3(d). 146 Ibid, Sch 11, para 19. For the meaning of rollover, see 12.45(4). 147 Ibid, s 256(2). 148 Ibid, Sch 11, para 31. 149 Ibid, Sch 11, para 30(1)(a) and s 19(1). See 12.15 as to the definition of a non-commercial society. 150 See 12.3. 151 Gambling Act 2005, Sch 11, para 31 and see 12.49. 152 Ibid, Sch 11, para 32.

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12.51  Gaming and Lotteries Run by the Club (4)

at least 20% of the proceeds of the lottery are applied to a purpose for which the society is conducted;153

(5)

the maximum prize for a purchaser of a single ticket is £25,000;154

(6)

no child should be invited or permitted to participate in the lottery.155 A young person, however, can participate;156

(7)

when a person purchases a ticket, he must receive a document157 which: (a) identifies the promoting society; (b) states the price of the ticket; (c) states the name and address of the society member who is designated as having responsibility for the promotion of the lottery or, if there is one, of the external lottery manager; (d) states the date of the draw (or each draw) or enables the date of the draw (or each draw) to be determined;158

(8)

the price for each ticket must be the same, and must be paid to the promoter of the lottery before any person is given the ticket or any right in respect of membership of the class among whom prizes are to be allocated;159

(9)

there may be a rollover160 if each other lottery which may be affected by the rollover is itself a small society lottery promoted by or on behalf of the same society, subject to the maximum prize condition set out above;161

(10) the promoting society must throughout the period during which the lottery is promoted be registered with the local authority (see 12.51);162 (11) the society must send to the local authority a statement containing certain specified matters (see 12.58).163 12.51 Registration of small society lottery Part  5 of Schedule11 to the 2005 Act contains detailed rules concerning registration with a local authority. 12.52 Local authority164 In England this means a district council,165 or the county council for a county with no district councils, or a London Borough Council, or the Common Council of the City of London, or the Council of the Isles of Scilly. In Wales this means a county council or a county borough council.

153 Gambling Act 2005, Sch 11, para 33. 154 Ibid, Sch 11, para 34. 155 Ibid, s 56(1). 156 Ibid, s 56(2). 157 A  document includes an electronic message which enables the recipient to retain the message electronically or to print it: Gambling Act 2005, Sch 11, para 36(2). 158 Ibid, Sch 11, para 36(1). 159 Ibid, Sch 11, para 37(1). The only payment required to become a member of a class is the price of a ticket: ibid, Sch 11, para 37(2). 160 For the meaning of rollover, see 12.45(4). 161 Gambling Act 2005, Sch 11, para 35(2). 162 Ibid, Sch 11, para 38. 163 Ibid, Sch 11, para 39(1). 164 Ibid, Sch 11, para 41. 165 A borough council counts as a district council.

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Small society lottery 12.57 12.53 Application166 The club applies to the local authority in whose area the club premises are situated, using a prescribed form and paying the prescribed registration fee, currently (2020) the sum of £40 and then an annual fee of no more than £20167. The local authority is obliged to maintain a register of small society lotteries and to notify the Gambling Commission of the registration. The authority must refuse the application if: (a)

within the previous five years an operating licence held by the club has been revoked;

(b)

within the said period the club’s application for an operating licence has been refused.

The authority may refuse the application if it thinks that: (c)

the club is not a non-commercial society;

(d)

a person who will or may be connected with the promotion of the lottery has been convicted of a gambling offence;168

(e)

information provided in or with the application is false or misleading.

The local authority may not refuse an application unless the club has been given the opportunity to make representations. 12.54 Revocation169 The local authority may revoke a registration if it thinks that it would be obliged or permitted to refuse an application for the registration were it being made anew, that is, on the grounds set out in 12.53. The revocation may take effect immediately or at the end of a specified period not exceeding two months from the date of revocation. The local authority may not revoke a registration unless the club has been given the opportunity to make representations. 12.55 Cancellation170 The club can apply in writing to the local authority for the registration to be cancelled. The club’s failure to pay the annual fee may lead to cancellation of the registration.171 12.56 Appeals172 If a local authority refuses an application or revokes a registration, the club may appeal to the local magistrates’ court within 21 days of the receipt of the refusal or revocation. 12.57 Annual fee173 The club is required to pay an annual fee to the local authority, currently (2020) the sum of £20.

166 Gambling Act 2005, Sch 11, paras 42–49. 167 Small Society Lotteries (Registration of Non-Commercial Societies) Regulations 2007, SI 2007/2328, regs 3 and 5. 168 Gambling Act 2005, Sch 11, para 48(b) and Sch 7, para 1(a). 169 Ibid, Sch 11, para 50. 170 Ibid, Sch 11, paras 52, 53. 171 Ibid, Sch 11, para 54(3). 172 Ibid, Sch 11, para 51. 173 Ibid, Sch 11, para 54(1)–(2). See 12.53.

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12.58  Gaming and Lotteries Run by the Club 12.58 Records174 The club must send to the local authority a statement which sets out the arrangements for the lottery (including the dates on which tickets are available, the date of any draw and the arrangements for prizes including any rollover); the proceeds of the lottery; the amounts deducted for prizes and costs of organising the lottery; the amount applied to a club purpose; and what expenses (if any) were defrayed otherwise than by deduction from the proceeds. This statement must be sent to the local authority within three months of the draw, or the last draw, of the lottery. The statement must be signed by two adult members of the club appointed by the governing body of the club, and a copy of the appointment itself must accompany the statement. The local authority must retain the statement for at least 18 months and make it available to members of the public (for a reasonable fee). If the local authority thinks from the statement that the lottery in question is a large lottery, it shall notify the Gambling Commission of this fact. 12.59 Entry into club premises Where the club is registered with a local authority, an enforcement officer175 or an authorised local authority officer may enter the club premises for the purpose of making enquiries in connection with a lottery promoted on behalf of the club.176

14.  Lotteries: a miscellany 12.60 Unclaimed prizes There are occasions when for a variety of reasons the club is unable to deliver the prize to the purchaser of a winning ticket. What happens to the prize? There is no problem if a rollover is permitted as in a small society lottery: the prize simply gets carried forward. In private society lotteries, which commonly have more than one draw, this problem is seldom encountered because they are in-house lotteries. A problem may arise in an incidental lottery because the lottery winners have to be declared at the event itself, which is a one-off occasion, and the participants often comprise non-members of the club. Suppose the non-member winner has gone home early feeling unwell and so is absent from the draw? Can the ticket be re-drawn? The answer is in the negative. The winner must be contacted. If this proves impossible after a reasonable attempt at locating the winner, there is no statutory answer. If the unclaimed prize is a sum of money, we suggest that the prize is allocated to the next lottery if feasible or that it simply becomes part of the club’s general funds. If the prize is some tangible goods, for example, a bottle of whisky or a collection of pot plants, we suggest that the committee decides how best to dispose of the prize. 12.61 Lottery draw All participants must have an equal chance of winning. A practice sometimes followed is to draw the prizes in the reverse order of value or amount so that this makes the draw more exciting by leading up to the climax of the main prize. It is arguable, however, that in a reverse-value draw the winner of a lesser prize will be deprived of his chance of winning the main prize. Another point that requires consideration is the nature of prizes where the winning ticket is sold

174 Gambling Act 2005, Sch 11, paras 39 and 55. 175 Ie an employee or authorised agent of the Gambling Commission: Gambling Act 2005, s 303(1)–(2). 176 Gambling Act 2005, s  314. See also Gambling Act  2005 (Inspection) (Provision of Information) Regulations 2007, SI 2007/319.

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Betting 12.64 to a child or young person at say a club raffle which constitutes a private society lottery. Suppose one of the prizes is a box of cigars or a bottle of whisky: could this lawfully be won by a child or young person? We believe not,177 and that the answer is to offer the winner a substitute prize of equal value. 12.62 Lottery operating licence If a club for any reason is unable to take advantage of the exempt lottery provisions the alternative is to seek a lottery operating licence.178 Part  5 of the 2005 Act sets out the regulatory regime for controlling and monitoring the activities of lottery operators, the detailed provisions of which are outside the scope of this book. The holder of a lottery operating licence is required to pay an annual fee to the Gambling Commission.179 Lottery duty is no longer payable on any lawful lottery other than the National Lottery.180

15. Betting 12.63 Betting is statutorily defined181 as making or accepting a bet on: (1)

the outcome of a race, competition or other event or process; or

(2)

the likelihood of anything occurring or not occurring; or

(3)

whether anything is or is not true.

The definition of betting has been extended to include prize competitions.182 12.64 It should be remembered that insofar as betting is concerned two key criminal offences183 under the 2005 Act are: (1) providing facilities for gambling (which includes betting) unless a person holds an appropriate operating licence (that is, a betting operating licence) or unless an exception applies;184 (2) using premises for providing facilities for betting (whether making or accepting bets or by acting as a betting intermediary or providing other facilities for the making or accepting of bets) unless the use of the premises is authorised by a person holding a betting operating licence or unless an exception applies.185

177 The sale of tobacco is prohibited to someone under 18 years: Children and Young Persons Act 1933, s 7(1) as amended by Children and Young Persons (Protection from Tobacco etc) Order 2007, SI 2007/767; and the supply of alcohol by a member or officer of the club is prohibited to a person under 18: Licensing Act 2003, s 147(3)–(4). 178 Gambling Act 2005, s 98. 179 Ibid, s 100. 180 See HMRC, Excise Notice 458: Lottery Duty Update 24 February 2017. 181 Gambling Act 2005, s 9(1). 182 Ibid, s 11. A prize competition involves betting on an event or events of uncertain outcome but does not involve the deposit of a stake which is the norm in betting; here the participant is required to pay to enter the competition. Schedule 1 to the 2005 Act contains detailed provisions as to what is meant by payment to enter a prize competition. 183 For Crime, see Chapter 18. 184 Gambling Act 2005, ss 33–36. 185 Ibid, ss 37–40.

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12.65  Gaming and Lotteries Run by the Club 12.65 Whereas there is statutory exemption for the provision of certain facilities for gaming or lotteries in clubs, no analogous exemption permits betting on club premises. Thus betting as such is an illegal activity on club premises.

16.  Cross-category activities 12.66 Betting and gaming Gambling transactions where there is an overlap between betting and gaming are to be treated as gaming for the purposes of the 2005 Act,186 unless the betting in question constitutes pool betting.187 Roulette, for example, involves the placing of bets at fixed odds, but in those clubs where this game is authorised gaming it will not be treated as an illegal form of betting. So too a race night at the club does not involve illegal betting. 12.67 Betting and lotteries Where gambling transactions satisfy the definition of both a betting prize competition and a lottery, the arrangements are to be treated as betting188 unless they constitute a lawful lottery.189 12.68 Gaming and lotteries Where gambling transactions satisfy the definition of both a game of chance and a lottery, the arrangements are to be treated as a game of chance190 unless they constitute a lawful lottery.191 An example of overlap involving race nights is given in 12.18. Another example is the playing of bingo: see 12.37.

17.  Proprietary clubs 12.69 General applicability of gambling law As stated above in 12.3, proprietary clubs are described in the 2005 Act as commercial clubs. Such clubs are subject to the provisions of this Act. Commercial clubs come within the Part 12 regime except that they are not entitled to apply for a club gaming permit (see 12.25). Commercial clubs are entitled to take advantage of the exempt lottery provisions relating to incidental lotteries (see 12.44) but not those relating to private society lotteries (see 12.47) or small society lotteries (see 12.49).192

186 Gambling Act 2005, s 16(3). 187 Ibid, s 16(2). Pool betting is defined in ibid, s 12. 188 Ibid, s 18(3). 189 Ibid, s 18(2). 190 Ibid, s 17(4). 191 Ibid, s 17(3). 192 Ibid, Sch 11, paras 1(2), 10(2) and 30(1)(a).

258

Part 3:

External Relationships: The Club and Third Parties

259

Chapter 13

The Club’s Civil Liability to Third Parties

PART A: CONTRACT 1. Introduction 13.1 Whatever its nature and whatever its size, during the course of its lifetime a club is likely to be involved in contractual relationships of many sorts, either as purchaser of goods and services or perhaps as the provider for payment of services and facilities to outsiders. It is therefore crucial for those persons in charge of the club’s affairs that they are aware of their rights and obligations when entering into a contract. What follows below is the legal situation looked at from the point of view of liability rather than entitlement. Two points need emphasising. First is the importance of the law of agency, especially in the realm of unincorporated members’ clubs. Second is the desirability of recording agreements which have been made. It is common practice for people to enter into an agreement by telephone or by word of mouth since this is the way of the world, and we have no quarrel with this procedure. But a note or letter, by post, fax or e-mail, which is sent straight afterwards and which confirms the agreement, will often prevent a dispute arising later on.

2.  Unincorporated clubs: general principles of liability 13.2 Unincorporated members’ club1 There are four general propositions to remember when considering the club’s or the individual member’s contractual liability to a third party:2 (1)

the club is not a legal person;3

(2)

no contract can exist without principal parties;

(3) whether the member can be held personally liable for contracts purporting to have been made on behalf of the club depends on the law of agency;4 1 2 3 4

This category may include the relevant clubs which are CASCs or which come within the Literary and Scientific Institutions Act 1854. The converse situation, namely, pursuing the club’s contractual entitlement in contract, is discussed in terms of procedure only, in Section 3 of Chapter 19. Conservative and Unionist Central Office v Burrell [1982] 1 WLR 522, CA, at 527. Maritime Stores Ltd v HP Marshall & Co Ltd [1963] 1 Lloyd’s Rep 602, at 608.

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13.3  The Club’s Civil Liability to Third Parties (4) the member’s liability is normally limited to his entrance fee (if any) and his subscriptions;5 13.3 Working men’s club This club is not a legal person and so the principles set out in 13.2 are equally applicable to it.

3.  Principal parties 13.4 No legal personality The consequence of the lack of legal personality of an unincorporated members’ club means that the club itself is unable to enter into any contract with a third party. Let us assume, however, that a senior member, say the treasurer, has purported to act as agent for the club when making a contract. The law on this point is clear: if a person makes a contract on behalf of a non-legal person he may be held to have contracted in a personal capacity.6 That is the nub of the problem. 13.5 The committee’s prima facie liability The members of the managing committee, being in control of the club’s affairs, are in the ordinary course of events personally liable for all contracts made by them on behalf of the club because they will be held to be the principals.7 In this event the committee members will be liable to the full extent of the contract, not merely to the full extent of the club’s funds.8 A good example of a committee member being held liable is the case of Davies v Barnes Webster & Sons Ltd.9 Mr Davies was the president, a trustee and a member of the management committee of the Romford and Gidea Park Rugby Club, an unincorporated members’ club. At a special meeting the club membership (including the vote of Mr Davies) resolved to redevelop the clubhouse. That meant entering into a substantial contract with the builders, Barnes Webster. The contract was signed by the club’s treasurer on behalf of the club.10 The builders claimed a further sum of £147,000 in respect of authorised variations of the contract. Upon non-payment of this sum Mr Davies was served with a statutory demand albeit in his capacity of trustee. Mr Justice Mann refused to set aside this demand and at [16] of his judgment stated: ‘The basic position is that prima facie members of an unincorporated association such as this club are not personally liable for the acts of those who enter into contracts in the course of the affairs of the club. Exactly who is liable depends on the constitution of the club and what acts of authority and ratification have occurred. It is possible for all the members to be liable if they give appropriate authority, either in terms of the general rules of the club or in respect of particular transactions. But the general starting point is of course that that is not their intention. A member of a club is prima facie not liable for more than his or her subscriptions or other regular dues.’

5 6 7

Wise v Perpetual Trustee Co Ltd [1903] AC 139, PC, at 149. Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378, CA, at 386 (Scott LJ). Glenester v Hunter (1831) 5 Car & P 62, at 65 (Tindal CJ); Steele v Gourley and Davis (1887) 3 TLR 772, at 773; Bradley Egg Farms Ltd v Clifford [1943] 2 All ER 378, CA, at 386. 8 Pink v Scudamore (1831) 5 Car & P 71. 9 [2011] EWHC 2560 (Ch). 10 So the treasurer could have been personally liable: see 13.4.

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Principal parties 13.6 The judge went on to hold at [31] that the correct analysis of the problem before him was the proper application of the principles of agency and he stated: ‘the management committee was entrusted with the development of the club and one would expect the management committee to be liable for the debts incurred by officers of the club and those dealing with it.’ In fact, no minutes of the Committee were put before the court but the judge held that the only candidate as principal on the facts was the Committee. This meant Mr Davies could expect an indemnity from the club: see the judgment at [44]. 13.6 Common purpose The status of principal leads to a point of practical significance. It will be recalled that the Committee must act unanimously unless (which is the norm) it is expressly authorised to act by a quorate number.11 The question of liability which arises is whether a committee member, who opposes or dissents from a decision of the majority, say, to enter into a contract with a particular third party, is liable to that third party if the Committee defaults on its obligations under the contract. At first sight the answer would appear to be in the negative. In Todd v Emly12 a wine merchant sued two committee members of the Alliance Club for the price of goods ordered by the steward. Neither defendant had ordered the wine nor been present at any committee meeting when authority to place an order was given to the steward. On the second appeal Mr Baron Alderson stated in his judgment, at 510: ‘In order to make the case out, and to establish the liability of the committee generally, the jury should be satisfied that what was done was not only within the knowledge of the committee generally but that it was in the particular knowledge of the two defendants.’ The same judge in the course of argument had stated at 508: ‘It might be that the majority only gave authority, and that the defendants dissented from it. If so, I should think they only were liable who voted for it.’ The sting in the tail lies in what the court had said on the first appeal. Mr Baron Alderson stated, at 435, as follows: ‘… here the committee were authorised only to deal, as a body, for ready money. But at the same time, if any of the members of the committee choose not to contract for ready money, those members of the committee who have so contracted are liable upon their own contract, and the members who have not concurred in it are not liable, unless that be the common purpose for which the committee was appointed.’ (emphasis added) The ‘common purpose’ point was reiterated in the same appeal, at 434, by Mr Baron Parke: ‘Then we come to the other, which is the main point of the case, and upon which it may be urged, that where parties enter into one common purpose of

11 See 5.25. 12 (1841) 7 M & W 427 (first appeal); (1841) 8 M & W 505 (second appeal).

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13.7  The Club’s Civil Liability to Third Parties acting together, each of them has authority to bind the others to the extent of attaining that common purpose. But the defect of the plaintiff’s case is, that there is no common purpose shewn, of dealing on credit for such articles as supplied in this case.’13 The ‘common purpose’ exception is likely in practice to mean that the dissenting member of the Committee may well find himself potentially liable on a contract which he had neither agreed nor approved of and, depending on the nature or size of the contract, this state of affairs might involve his resignation from the Committee. 13.7 New committee member’s assumed liability A question which can arise is whether a new member of the Committee can be held liable in respect of authorised contracts made before his election. On the face of things, the answer is in the negative because the principals are fixed at the date when the contract was made and there is no such procedure as ‘rolling substitutes’ (unless the other party were to agree to this, which would technically be known as novation). However, we consider that the new member may find himself liable on the contract because he has adopted it as his own. Take the following example: in January the Committee places an order for building works; in July the new committee member is elected; in October as such member he votes in favour of a resolution to sue the builder for defective workmanship; the builder denies the claim and counterclaims against the club for work done and materials supplied; his defence succeeds and he obtains judgment on the counterclaim. The new member will have judgment entered against him.14 13.8 Former committee member’s continuing liability Another question arises whether a member, who ceases to be on the Committee is still liable on a surviving contract which the Committee had earlier entered into on behalf of the club when he was on the Committee. The answer depends on whether the contractual parties stay the same as when he was on the Committee or whether there has been novation, that is to say, with the agreement of the other party the member in question has been replaced by another committee member.15 If the former, his liability is continuing;16 if the latter, his liability will have ceased on the replacement because the original contract would have been rescinded.17

4.  The law of agency 13.9 The role of agency In an unincorporated members’ club the Committee as principal will commonly rely on one of the club’s officers, such as the club secretary, or one of its employees to organise or enter into contracts on behalf of the club. The officer or employee will be acting as the Committee’s authorised agent. The general rule of the law of agency is that the contract of the agent is 13 See also the judge’s remarks in the same case quoted in 5.44. 14 Delauney v Strickland (1818) 2 Stark 416 (Abbott LCJ) (concerning a member’s liability to a third party in the General Service Club). See also 13.16. 15 Scarf v Jardine (1882) 7 App Cas 345, at 351; Chatsworth Investments v Cussins [1969] 1 WLR 1. 16 Parr v Bradbury (1885) 1 TLR 285 and 525, CA (continuing liability of a member under a debenture entered into before cessation of membership). 17 Scarf v Jardine (1882) 7 App Cas 345, at 362 (Lord Blackburn).

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The law of agency 13.12 the contract of the principal,18 so that the agent has power to bind and entitle his principal whilst he himself drops out of the transaction, incurring neither rights nor liabilities.19 Proving the necessary agency is all-important in establishing liability against the principal. We add that in a company club, the club itself will be the principal and the committee members will here be acting as agents in the same way as the club’s officers or employees, but the principles of agency are the same. 13.10 Agency is established in one of three ways: expressly, impliedly or ostensibly.20 Express authority (also called actual authority) is where the principal gives the agent by means of spoken words or in writing the ability to act on his behalf either generally or in relation to specific matters. Implied authority (also called usual authority) is where the agent is put into a position to do whatever is ordinarily or necessarily incidental to the due performance of his express authority. Ostensible authority (also called apparent authority) is where the principal holds out the agent as having the requisite authority to act on his behalf21 when in fact the agent had no such authority, or had limited authority only, which restriction was unknown to the other party. 13.11 Implied authority Take the case of Cockerell v Aucompte,22 where the Committee of an unincorporated coal club23 expressly authorised the secretary to buy coal but did not furnish him with any cash funds to pay for it. The court held that the Committee impliedly authorised the purchases on credit terms and, because the secretary was its duly appointed agent, the committee members were held liable to the coal merchant. Contrast it with the case of Wood v Finch,24 where a member and a trustee member of an unincorporated coal club, which was formed on the express principle of buying coal wholesale on a cash basis out of members’ paid-up subscriptions, were held not impliedly liable to the plaintiff coal merchant for the price of goods ordered by the club secretary on credit terms. 13.12 Further, the Committee of the club has no implied authority to pledge the credit of the members generally, for example, when ordering goods to be supplied25 or work to be done26 or when borrowing monies on debentures.27 This is because the Committee must be taken to know of and assent to the general proposition that an unincorporated members’ club is run on a cash basis (see 5.54). Consequent upon this lack of implied authority, if the Committee enters into an authorised contract, its authority is restricted to spending the existing funds of the club.28 It has been long established, however, that the Committee has implied authority to 18 Chitty on Contracts (33rd edn, 2019) at 31-83. 19 Ibid, at 31-001. 20 Ibid, at 31-020 and 31-83. There are numerous reported cases dealing with this topic but see, in particular, Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, at 503 (Diplock LJ) for a widely accepted summary definition. 21 It is important to note that it is not sufficient for the agent to represent the extent of his authority; the holding out must be done by the principal: Armagas  Ltd v Mundogas SA [1986] AC 717, at 777. 22 (1857) 2 CB(NS) 440. 23 Such clubs were common in Victorian times. As befitted a justice of the peace, Charles Darwin was the honorary treasurer of the local coal club in the village of Downe in Kent. 24 (1861) 2 F & F 447. 25 See Todd v Emly (1841) 7 M & W 427, at 434; Hawke v Cole (1890) 62 LT 658. 26 Flemyng v Hector (1836) 2 M & W 172. 27 Re St James Club (1852) 2 De GM & G 383, at 390. 28 Cockerell v Aucompte (1857) 2 CB(NS) 440. However, this principle does not absolve the committee from full liability under the contract: see 13.4.

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13.13  The Club’s Civil Liability to Third Parties pledge the members’ credit when it comes to the employment of staff.29 We add that an individual member could, if he so wished, expressly authorise the club or the Committee to pledge his personal credit.30 13.13 Ostensible authority The Committee (or the company club) may clothe the agent with ostensible authority by holding him out as having proper authority to make a contract which pledges their credit.31 Here each case has to be decided on its own facts, leading sometimes to seemingly odd or inconsistent results: (1)

in the case of Steele v Gourley and Davis32 (where the proprietary Empire Club became an unincorporated members’ club called the New Empire Club) the butcher, in an action against two members of the Committee, succeeded in recovering the price of meat supplied to the new club but in the later case of Overton v Hewett,33 the fishmonger, in another action against all the members of the same Committee, failed to recover the price of poultry supplied to the new club, the difference being that in the first case the defendant committee members had by their conduct authorised the steward to purchase the goods whereas in the second case the plaintiff could not point to any such conduct on the part of the committee members;

(2)

in the case of Harper v Granville Smith34 (where the proprietary Salisbury Club became an unincorporated members’ club called the New Salisbury Club) the wine merchant, in an action against a member of the Committee, succeeded in recovering payment for champagne supplied to the new unincorporated club but a year later in the case of Draper v Earl Manvers35 the milkman, in another action against a different member of the same Committee, failed to recover the price of milk delivered to the new unincorporated club, the difference being that in the first case the committee member was aware of the transaction when the order was placed by the wine committee whereas in the second case the Committee had under the rules delegated its purchasing function to a sub-committee and thus the sued committee member had taken no part in ordering the milk.

13.14 Ratification If an act has been carried out without authority from the club, for example, a committee member or the secretary in a sports club on his own initiative orders some expensive equipment to be supplied and delivered to the club, the question of ratification may well arise. In an unincorporated members’ club the Committee may assume personal liability by ratifying an unauthorised contract made by an agent of the club.36 A  contract can only be ratified by the person or persons on whose behalf the contract was purportedly made.37 For ratification to take place the principal must know all the material circumstances.38

29 Todd v Emly (1841) 7 M & W 427: see 5.44. 30 Overton v Hewett (1886) 3 TLR 246, at 249 (Wills J). 31 See, eg  Pilot v Craze (1884) 4  TLR  453 (where the manager of a five-man committee organising a jubilee fête hired tents and flags; two stewards forming part of that committee were successfully sued for the hire charges). 32 (1886) 3 TLR 118 affirmed by CA at (1887) 3 TLR 772. 33 (1886) 3 TLR 246. 34 (1891) 7 TLR 284. 35 (1892) 9 TLR 73. 36 Jones v Hope (1880) 3 TLR 247 (note), CA, at 249 (Cotton LJ) (concerning the liability of the officers in an unincorporated volunteer corps to a wine merchant for goods supplied). 37 Re Tiedemann & Ledermann Frères [1899] 2 QB 66. 38 De Bussche v Alt (1878) 8 Ch D 286, CA, at 313.

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Member’s liability 13.17 Ratification may be inferred from silence or acquiescence.39 Take the case of goods which are ordered by the club’s agent without authority but which are used by the club members. Mere use of the goods by the members does not amount to ratification. But once the Committee know about the true situation and acquiesce in it, it will have ratified the transaction in question. We add that in a company club ratification of an unauthorised contract by the club will normally take place via a director or the Committee. Here ratification will not involve the director or the committee member in any personal liability, subject to: (a) what is said about the director’s duty in 13.24; and (b) any restriction of the Committee’s authority contained in the club rules. 13.15 Breach of warranty of authority If a committee member purports to make a contract on behalf of the club or the Committee when he has no authority of any sort to make the contract, he will be liable in damages to the other party for breach of warranty of authority if the club or the Committee via a valid quorum rejects the contract.40 On the other hand, if the club or the Committee ratifies the unauthorised contract, the member will be exonerated from liability.41 Yet again, if the other party knows or is put on enquiry that the committee member has no authority and the club or the Committee rejects the contract, this member will have no personal liability towards that other party.42

5.  Member’s liability 13.16 The ordinary member’s prima facie non-liability As stated in 1.11, the general rule is that no member of the club is liable to pay to the club itself or to a third party any moneys beyond his entrance fee (if any) and his subscriptions. The rule, now almost universal, which vests the control of all the club’s affairs in a managing committee would not by itself give to the Committee the authority to make contracts on behalf of the members.43 On the other hand, the rules of the club might expressly authorise the Committee to make contracts on behalf of all the members; in this event the whole membership will be liable as principals on any authorised contract. This is a rule found in some early Victorian clubs, but an unwise one seldom if ever found in modern times. 13.17 Member’s approbation of a club contract Acquiescence in or tacit approbation of a club contract may be sufficient to establish liability against a member.44 For example, in Stansfield v Ridout45 the Committee of the Beaconsfield 39 Bank Melli Iran v Barclays Bank DCO (1951) 2 TLR 1057, at 1063. 40 Collen v Wright (1857) 7  E  & B  301, affirmed on appeal (1857) 8  E  & B  647 (a prime example of judicial law making: see Cockburn  CJ’s dissenting judgment at 658). The correct measure of damages flowing from this breach of warranty can raise a ‘troublesome issue’: Habton Farms v Nimmo [2003] EWCA Civ 68 (where the Court of Appeal was divided on the issue of damages); see also Penn v Bristol & West of England Building Society [1997] 1 WLR 1356. 41 Jones v Hope (1880) 3 TLR 247 (note), CA, at 248; Overton v Hewett (1886) 3 TLR 246. 42 Russo-Chinese Bank v Li Yau Sam [1910] AC 174, PC. And see Gore-Browne on Companies (45th edn, looseleaf) at 8[19]. 43 Flemyng v Hector (1836) 2 M & W 172, at 185 (Parke B). 44 Steele v Gourley and Davis (1886) 3 TLR 772, CA, at 773 (Lord Esher MR); Earl of Mountcashell v Barber (1853) 14 CB 53 (concerning a bank loan made to the managing committee of the Colonial Society). 45 (1889) 5 TLR 656.

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13.18  The Club’s Civil Liability to Third Parties Conservative Club in Battersea authorised the secretary to purchase beer from the plaintiff brewer. An action was brought against four members of the club, only one of whom was a member of the Committee but all of whom had signed cheques for various goods ordered by the secretary, and all were held liable to the plaintiff. And in Lee v Bissett46 a solicitor-member of the Naval and Military Club successfully sued certain members of the club in their personal capacity for his fees for work done on behalf of the club, the members in question being those who had previously each subscribed £60 to carry on the club, which was in financial straits, thereby enabling the club to employ the solicitor. 13.18 Member’s signature on a club contact A member who has authority to enter into a contract on behalf of the club or the Committee may become personally liable if he signs the contract without expressing his agency.47 However, parol evidence would generally be admissible to show that the club or the committee was the real principal.48 When acting for the club or the Committee, a member should sign his own name on a document followed by the words of agency and then the principal’s name: for example, ‘Tom Pearce for and on behalf of the committee of the Basset Pony Club’. It is perhaps an acceptable practice for a member nowadays to state the agency on behalf of the club itself, that is, ‘Tom Pearce for and on behalf of the Basset Pony Club’. This abbreviation comes about because of the modern law informally giving unincorporated associations many of the characteristics of legal personality.49 Using the above formula, the member will be protected by the general rule of the law of agency set out in 13.9. 13.19 Protection of the Committee It may be seen from 13.5 that the members of the managing committee in an unincorporated members’ club are vulnerable to being held personally liable to the club’s creditors and proper consideration should be given as to how these members may best be protected. There are various ways of doing this: (1)

Express exclusion or restriction of liability: exclusion or restriction of liability by contract is permissible. The Committee can try to limit the liability of the committee members by persuading the other party to the contract to permit an express clause in the contract whereby the Committee was only liable to the extent of the club’s funds.50 This might mean that the Committee would have to divulge precisely what those funds were and the members as a whole might not look too kindly on such disclosure. Alternatively, the Committee can by an express clause  seek to exclude or restrict liability generally or to set a maximum limit on the amount of its liability. This may not be acceptable to the other party and in any event may be affected by the provisions of the Unfair Contract Terms Act 1977 or the Consumer Rights Act 2015.51 Where the other party to the contract enters a contract on the

46 (1856) 4 WR 233. 47 Brandt (H O) Co v H N Morris & Co Ltd [1917] 2 KB 784, CA, at 793 (Viscount Reading CJ) (‘when a man signs a contract in his own name he is prima facie a contracting party and liable, and there must be something very strong on the face of the instrument to shew that the liability does not attach to him’). 48 Fred Drughorn Ltd v Rederiaktiebolaget Transatalantic [1919] AC 203. 49 See R v RL and JF [2008] EWCA (Crim) 1970 cited in 1.9. 50 De Vries v Corner (1865) 13 LT 636. 51 Unfair Contract Terms Act 1977, ss 1(3)(a) and 3 and Consumer Rights Act 2015, ss 3, 33, and 48.

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Member’s liability 13.19 club’s ‘written standard terms of business’,52 exclusion or restriction of liability (including quantum of loss)53 on the club’s part must satisfy the requirement of reasonableness.54 If the club is acting as a trader,55 Part 1 of the Consumer Rights Act 2015 will apply to protect the consumer from any contract terms excluding or restricting the consumer’s right to a remedy under this Act in respect of goods or services provided by the club.56 In these circumstances the club needs to be protected by insurance; (2)

Raising subscriptions: faced with a shortfall in funds wherewith to carry out the club’s activities or to embark on a particular project, it is not only perfectly in order to call a special meeting to raise subscriptions generally or to have a one-off rise in the subscription or to make a levy on the members, but such a remedy is a classic way of overcoming a shortfall.57 In appropriate cases the club might consider establishing a reserve or sinking fund. This is a specially designated account set aside by the club to meet any unexpected costs that may arise in the future as well as the anticipated costs of the upkeep or maintenance or improvement of the club premises;

(3)

Lien: if the Committee has incurred personal liability by reason of entering into some authorised contract for the benefit of the club, the committee members will have a lien on the club property to the extent of their liability. The Irish case of Minnit v Lord Talbot de Malahide58 is instructive on this point. The members of the Irish Farmers’ Agricultural Club in general meeting authorised the Committee to borrow £1,000 for building works to the club premises and for the provision of fittings and furniture. The Committee raised the money on the security of guarantees given by certain members of the Committee. This course of action was approved by the members in general meeting. The work was carried out and the fittings and furniture were provided. The work and goods were not fully paid for out of club funds and the club failed, whereupon the guarantees were called upon and honoured. The club property was sold and the committee members were held entitled to reimbursement out of the proceeds of sale by virtue of their lien;59

(4)

Indemnity: although it is considered unwise to give the members of the managing committee a blanket indemnity in the rules for any expenditure which they may incur in that capacity, there is nothing untoward or unusual in a more restricted rule which states that the members of the Committee, the officers of the club, and the officials of the club shall be indemnified by

52 53 54 55

56 57 58 59

Unfair Contract Terms Act 1977, s 3(1). Ibid, s 11(4). Ibid, s 11; Walker v Boyle [1982] 1 WLR 495. A club could be carrying on a business in its role of providing goods or services to members of the public, for example, a railway preservation society, which is a members’ club and which carries many members of the public for payment on its trains, would to this extent be carrying on a business: see Josling and Alexander, The Law of Clubs (6th edn, 1987) at p 99. Consumer Rights Act 2015, ss 31, 47 and 57. Flemyng v Hector (1836) 2 M & W 172, at 183 (Lord Abinger CB). (1876) LR 1 Ir 143. In fact the proceeds of sale were insufficient and the committee members obtained a court order ((1881) LR 7 Ir 407) that they were entitled to an indemnity from the members as to the outstanding balance. This order would not be made today because of the definitive ruling in Wise v Perpetual Trustee Co Ltd [1903] AC 139, PC that the member’s liability is in the ordinary course of events restricted to his entrance fee and subscriptions.

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13.20  The Club’s Civil Liability to Third Parties the club out of club funds against any legal claim made against them in connection with the proper discharge of their duties;60 (5)

Contribution: where a member of the Committee has paid out moneys in respect of an authorised contract, he is entitled to a contribution from his fellow members of the Committee,61 but he will have no right to an indemnity from the members of the club62 (in the absence of an express rule conferring an indemnity);

(6)

Insurance: proper consideration should also be given to the obtaining of insurance in relation to all the activities of committee members. A  prime example would be the case of Bradley Egg Farm Ltd v Clifford63 where the defendants were the executive council of an unincorporated association called the Lancashire Utility Poultry Society. The Society entered into a contract with the plaintiff to carry out tests on its poultry. Its employee negligently caused damage to the poultry when carrying out the tests and the plaintiff successfully sued the members of the council for substantial damages. Failure to carry insurance in these circumstances would be foolish.

6.  Corporate clubs: general principles of liability 13.20 Community club This club is itself a legal person and to this extent its position is akin to that of a company club when it comes to liability in contract to third parties. Neither the members of the club nor its Committee will in the ordinary course of events be personally liable because of the general rule of agency law set out in 13.9. The club needs to understand the categories of an agent’s authority set out in 13.10 and the principles of ratification and breach of warranty of authority set out in 13.14 and 13.15. The Committee remains under a duty to observe any limitation on its powers flowing from the club’s rules.64 Where a third party deals in good faith with the club, the power of the Committee to bind the club, or to authorise others to do so, shall be deemed to be free of any limitation under the club rules.65 Finally, these clubs have no directors but officers and a Committee instead66 and, as a result, little of the statutory regime applicable to company directors is of relevance to these clubs. However, with regard to community clubs, section 57 of the Co-operative and Community Benefit Societies Act 2014 is the equivalent to section 51 of the Companies Act 2006 (see 13.27). If a person purports to enter a contract on behalf of a community club before it has been registered, section 57 imposes liability under the contract on that person unless agreement to the contrary can be established.

60 Mr JF Keeler MA BCL (Oxon) in an article entitled ‘Contractual Actions for Damages against Unincorporated Bodies’ (1971) 34 MLR 615, at 616, suggested that committee members have an implied indemnity out of club funds for expenses properly incurred; sed quaere. 61 Earl of Mountcashell v Barber (1853) 14 CB 53, at 69. 62 Wise v Perpetual Trustee Co Ltd [1903] AC 139, PC, at 149. 63 [1943] 2 All ER 378. 64 Co-operative and Community Benefit Societies Act 2014, s 43(4). 65 Ibid, s 45. 66 ‘Officer’ is defined as any treasurer, secretary, member of the committee, manager or servant other than a servant appointed by the committee and excludes an auditor: Cooperative and Community Benefit Societies and Act 2014, s 149.

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The role of directors 13.25 13.21 Company club67 This club is itself a legal person so that its liability in contract rests with the club. Neither the members of the club nor its Committee will in the ordinary course of events be personally liable because of the general rule of agency law set out in 13.9. The club needs to understand the categories of an agent’s authority set out in 13.10 and the principles of ratification and breach of warranty of authority set out in 13.14 and 13.15. The director’s role is set out in 13.24. 13.22 Community interest company The situation is the same as for a company club. 13.23 Charitable incorporated organisation The situation in relation to an Association CIO is basically the same as for a company club.

7.  The role of directors 13.24 Director’s legal duty The director is under a legal duty to abide by the company’s constitution and may only use his or her powers for the purposes for which they are conferred.68 This means that the director is required to abide by any restrictions set out in the constitution (that is, set out in the articles of association, which now include the old-style memorandum of association). For example, an article might state that a director may not enter into a contract on behalf of the company where the price payable by the company exceeds £50,000 without the prior consent of the members being given in general meeting. Suppose a director, without obtaining such consent, enters into a contract on behalf of the company with a third party where the price payable by the company is £75,000. This would normally have two consequences: (a) the company will be bound by the contract; and (b) if the director’s breach of duty causes the company loss or damage, he may find himself personally liable to make good the loss or damage.69 13.25 Protection of the director There are various ways in which a director may be relieved from liability which would otherwise fall on him for breach of duty: (1)

Insurance: any provision which purports to exempt a director of a company from liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.70 But the company is permitted to purchase and maintain for the director’s benefit insurance against such liability in relation to the company itself71 and, equally important, to provide an indemnity against such liability in relation to third parties;72

67 This category may include the relevant clubs which are CASCs or whch come within the Literary and Scientific Institutions Act 1854. 68 Companies Act 2006, s 171. 69 See, eg Companies Act 2006, s 40(5). 70 Ibid, s 232(1). 71 Ibid, s 233. 72 Ibid, s 234. This indemnity does not cover any fine imposed on the director or his legal costs where the director is convicted of a criminal offence: s 234(3).

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13.26  The Club’s Civil Liability to Third Parties (2)

Ratification by ordinary resolution: some breaches of duty can be overlooked through the director’s conduct being disclosed to the members in general meeting and ratified by the passing of an ordinary resolution. It is not always easy to draw the line as to what is ratifiable in this manner. Examples of ratifiable conduct are failing to disclose an interest in a contract to which the company is a party;73 obtaining a secret profit in circumstances where there was no misappropriation or misapplication of company property;74 and breach of the duties of skill and care.75 On the other hand, breaches involving a failure of honesty of the director’s part,76 or involving a fraud on or oppression of the minority of shareholders77 are not capable of being excused by this route;

(3)

Ratification by the consent of all members: the approval of the director’s conduct by every member of the company, either before or after the breach of duty, will relieve the director in all cases from liability provided that the breach is not ultra vires the company and does not involve a fraud on its creditors;78

(4)

Release by the court: under section 1157 of the Companies Act 2006 a director may be relieved from liability in certain defined circumstances. What the director has to prove is: (a) that he acted honestly; (b) that he acted reasonably; and (c) that he ought fairly to be excused from liability. The third element involves the discretion of the court being exercised in the director’s favour.79 Any relief granted will be on such terms as the court thinks fit.

8.  Third party protection 13.26 As stated in 5.51, the ultimate control in a company club rests with the directors. A director when acting for the company in contractual matters will be its agent in the same way as a committee member of an unincorporated members’ club or a community club. Although a company has its own separate legal personality it has no ability to think or act for itself, so it can only act by resolution of its members in general meeting or by its agents.80 As Lords Toulson and Hodge stated in Bilta (UK) Ltd (in liquidation) v Nazir (No 2):81 ‘a company can … incur direct liability through the transactions of agents within the scope of their agency (actual or apparent). Thus, when an agent commits his or her company to a contract, the company incurs direct liabilities

73 North-West Transportation  Co v Beatty (1887) 12 App Cas 589, PC and Burland v Earle [1902] AC 83. 74 Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134 (Note), at 150 (case decided in 1941). 75 Pavlides v Jensen [1956] Ch 565, at 576. 76 Mason v Harris (1879) 11 Ch D 97, CA. 77 Cook v Deeks [1916] 1 AC 554, PC. 78 Companies Act 2006, s 239(6)(a); Gore-Browne on Companies (45th edn, looseleaf) at 17[3]. 79 Re J Franklin & Son Ltd [1937] 4 All ER 43 in relation to an earlier enactment. See also Green v Walkling [2007] EWHC 3251 (Ch) (relief granted under the earlier s 727 of the Companies Act 1985). 80 Ferguson v Wilson (1866–67) 2 Ch App 77, at 89. 81 [2015] UKSC 23 at [188].

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Proprietary clubs 13.28 (and acquires rights) as a party to the contract under ordinary principles of the law of agency.’ Hence, the law of contract applies adapted rules of agency whereby the company can be contractually bound.82 Prior to the Companies Act  2006 persons dealing with the company had to be on their guard as to whether they were entering into a valid contract with the company in case unbeknown to them the company was acting beyond its powers (acting ultra vires). Nowadays any third party dealing with the company in good faith need not concern himself about whether or not the company is acting within its constitution.83 An exception to this constitutional situation relates to charities. Sections  39 and 40 of the Companies Act 2006 (that is, a company’s capacity and the power of its directors to bind the company) do not apply to the transactions carried out by incorporated charities except where the third party either: (a) did not know the company was a charity; or (b) if he did, he gave full consideration for the transaction and did not know that the transaction (i) was not permitted by the company’s constitution or (ii) was beyond the powers of its directors.84 13.27 Contract with non-existent company A contract which purports to be made by or on behalf of a company with a third partry at a time when the company has not been formed, has effect (subject to any agreement to the contrary85) as one made with the person purporting to act for the company or acting as agent for it, and that person is personally liable on the contract accordingly.86 In Phonogram Ltd v Lane87 the court held that the person purporting to act for the company was liable personally, even though all parties were aware at the relevant time that no company was then in existence.

9.  Proprietary clubs 13.28 Here any contract touching or concerning the club will be the liability of the proprietor insofar as third parties are involved, such as suppliers of goods to the club. An individual member of the club might, however, become personally liable if by some independent contract he became liable to the third party, such as signing a guarantee in favour of the proprietor’s creditor, but nothing less than an independent contract will suffice to make the club member liable for the contractual affairs of the proprietor.

82 See Gore-Browne on Companies (45th edn, looseleaf) at 7A[1] and chapter 8. 83 Companies Act 2006, s 40(1). 84 Ibid, s 42(1). 85 See Royal Mail Estates v Maple Teesdale (a firm) [2015] EWHC 1890 (Ch) (decision based on the Companies Act 1985, s 36C, the forerunner of s 51 of Companies Act 2006). 86 Companies Act 2006, s 51(1). 87 [1982] QB 938.

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13.29  The Club’s Civil Liability to Third Parties

PART B: TORT 10. Introduction 13.29 A  tort is a civil wrong (not arising in contract) in respect of which an action for damages or compensation lies. A club’s liability in tort may arise either through the activities of its members or by virtue of its occupation or ownership of club premises. We are here dealing with situations where the club’s activities impinge on the lives or well-being of third parties who are not members of the club. Any managing committee will or should know, often because of complaints, whether the activities of its members or the state of repair of the club property carry the risk of adversely affecting other people’s well-being or enjoyment of life. As with agency in the law of contract, so here the doctrine of vicarious liability is an important factor which committees need to understand.

11.  Unincorporated clubs: general principles of liability 13.30 Unincorporated members’club There are three general propositions to remember when considering the club’s or the individual member’s tortious liability to a third party:88 (1)

the club is not a legal person;89

(2)

the member, if he is the actual tortfeasor, will potentially be personally liable to the injured or aggrieved party;90

(3) the managing committee, as the managers and controllers of the club’s affairs, will potentially be vicariously liable for the acts or omissions of those persons (whether employees or members of the club) who were acting in the course of their employment or acting in a manner authorised by the Committee, and the members of the committee may thus become personally liable for the tort.91 13.31 Working men’s club The member’s liability in tort is the same as applies to an unincorporated members’ club: see 13.30.

12.  Vicarious liability 13.32 A person is liable not only for the torts committed by himself but also for those whom he has authorised or ratified.92 Authorisation or ratification is not the 88 The converse situation, namely, pursuing the club’s remedy in tort, is discussed in terms of procedure only, at 19.2. 89 Conservative and Unionist Central Office v Burrell [1982] 1 WLR 522, CA, at 527. Any judgment obtained against such a club will be set aside: London Association for the Protection of Trade v Greenlands Ltd [1916] 2 AC 15, at 20. 90 This includes authorising the tortious act as well as committing it: Baker v Jones [1954] 1 WLR 1005, at 1011. 91 Jones v Northampton Borough Council [1990] Times LR 387, CA, at 388. 92 Ellis v Sheffield Gas Consumer’s Co (1853) 2 E & B 767. For the topic of vicarious liability generally, see Clerk and Lindsell on Torts (22nd edn, 2018) Chapter 6.

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Vicarious liability 13.34 same thing as vicarious liability, which has different parameters. In Lister v Hesley Hall Ltd93 Lord Millett, at 243, said: ‘Vicarious liability is a species of strict liability. It is not premised on any culpable act or omission on the part of the employer; an employer who is not personally at fault is made legally answerable for the fault of the employee’. The two most important classes of person for whose torts the managing committee may be vicariously liable are employees and independent contractors. As a generalisation, there is substantially less vicarious liability in relation to independent contractors as compared with employees, so it is important to ascertain into which category a person falls when he is retained or employed by the club. 13.33 Club’s liability for torts of employee The exact nature of the relationship that exists between the members of the club and its employees is unclear. It is probably true to say that no contractual relationship exists because of the members’ monetary liability being restricted to their entrance fees and subscriptions.94 The position is almost certainly different in relation to the managing committee since they are in control of the club’s affairs. However, being in control of the club’s affairs is not the same thing as being in control of a person’s work, which is one of the indicia that a person is an employee rather than an independent contractor.95 The modern approach of the courts is to adopt a ‘multiple’ test where all aspects of the relationship are assessed before coming to the conclusion that a person is an employee.96 In Mattis v Pollock (t/a Flamingos Nightclub)97 (where a club owner was held liable for the violent acts of assault of his doorman) the Court of Appeal stated that the established test for vicarious liability required a broad approach: Was the employee’s action so closely connected with what the employer authorised or expected of him in the performance of his employment that it would be fair and just to hold the employer vicariously liable for the damage sustained as a result of the employee’s act? 13.34 Employee’s dishonesty or fraud The question sometimes arises whether the club is liable for the dishonest or fraudulent acts of its employees. Suppose an employee goes into the club’s changing room and steals a member’s valuable watch. Is the club liable to make good the loss? As a general rule an employer is not liable for his employee’s dishonest conduct unless the wrongful act was committed in the course of employment. But, it might be asked, how can theft ever be within the scope of anyone’s employment? The answer at law lies in whether the goods have been entrusted to the employee for safe keeping: if yes, the theft was committed in the course of employment;98 if no, the employee 93 [2001] UKHL 22. 94 See Clerk and Lindsell on Torts (22nd edn, 2018) at 6-21. But see Campbell v Thompson and Shill [1953] 2 WLR 656 discussed at 16.4. 95 Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1, at 17 (Lord Porter). 96 Ready Mixed Concrete (South East) v Minister of Pensions and National Insurance [1968] 2 QB 497, at 516; Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173, at 184 (where Cooke J posed a rule-of-thumb guide: ‘Is the worker in business on his own account?’ If he is, he will not be an employee). 97 [2003] EWCA Civ 887 but on the limits of this approach see Mohamud v Wm Morrison Supermarkets plc [2014] EWCA Civ 116 (where the employee’s assault on a customer while on duty was, on the facts, apparently unconnected to his employment). 98 Morris v CW Martin & Sons Ltd [1966] 1 QB 716 (dry cleaning employers held liable for theft of a fur coat entrusted to the employee for cleaning); Nahhas v Pier House (Cheyne Walk) Management (1984) Times, 10 February (company held liable for thefts committed by its porter when he burgled a flat in the block using keys entrusted to his custody).

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13.35  The Club’s Civil Liability to Third Parties was acting outside his employment and the employer has no liability. Thus in the example of the stolen watch, if it had been the changing room attendant who stole the watch, the club would be liable to the owner, but if say it had been an opportunistic club chef it would escape liability. It should be pointed out that the employer’s liability for the misconduct of his employee does not depend on showing that the employer in some way benefited from the dishonesty or fraud; the employer will be liable even if the employee intended solely to benefit himself.99 13.35 Club’s liability for torts of independent contractor The general rule is that if a person employs an independent contractor to do work on his behalf, the employer is not responsible for any tort committed by the contractor or by the contractor’s employees in the course of the execution of the work.100 There are exceptions: if the law imposes a strict or absolute duty on the employer, the duty is said to be non-delegable and the employer will be liable for the torts committed by his independent contractor. Examples are statutory duties101 or common law duties such as the duty to prevent the escape of fire.102 The common law categories of non-delegable duties are said to be not yet closed.103 For example, in Woodland v Essex County Council104 the Supreme Court held that a school owed a non-delegable duty of care to ensure that swimming lessons for children were conducted and supervised with care, and the educational authority was held liable for the negligence of its third party contractor: on responsibilities for children, see further 5.69. Similarly, where the employer engages an independent contractor to do work which is inherently dangerous or which involves a special risk of damage, there is a well-established exception to the general rule. The employer is then under an absolute duty to take care and will be liable for the negligence or nuisance of his contractor.105 13.36 A  further exception is where the defendant employs an independent contractor but is in breach of a personal duty to take care towards others. The case of Brown v Lewis106 provides an interesting illustration of a Committee’s liability. The Committee of the Blackburn Rovers Football Club had the power and duty to provide a spectators’ stand. It needed repairing and the Committee employed a workman to repair it. The stand was negligently repaired and collapsed, injuring the plaintiff. Although the law report is silent on the point, it would appear that the workman was an independent contractor. The Committee was held liable, not because of the negligently carried out work, but because the Committee had negligently chosen an incompetent person to carry out the work. This is therefore

99 Lloyd v Grace, Smith & Co [1912] AC 716. 100 D & F Estates Ltd v Church Commissioners for England [1989] AC 177, at 208 (Lord Bridge). 101 Gray v Pullen (1864) 5 B & S 970 (defendant had statutory power to lay drains and a duty to reinstate the road after the drains were laid; the independent contractors negligently reinstated the road, for which the defendant was held liable). 102 Balfour v Barty-King [1957] 1 QB 496. 103 See generally Clerk and Lindsell on Torts (22nd edn, 2018) at 6-62–6-77. 104 [2013] UKSC 66. 105 Honeywill & Stein  Ltd v Larkin Bros  Ltd [1934] 1  KB  191 (negligence: dangerous flash photography used by contractor); Matania v National Provincial Bank  Ltd [1936] 2 All ER 633, CA (nuisance: escape of dust and noise caused by building contractor carrying out structural alterations). 106 (1892) 12 TLR 455.

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Negligence and nuisance 13.40 not a case of vicarious liability but a situation where the Committee was held liable for breach of a personal duty of care to a third party.107 13.37 Protecting the Committee The answer lies in insuring the Committee against third party tortious liability. The insurance should include cover for the consequences of the fraudulent or dishonest conduct of the club members or its employees, where such consequences are visited upon the club itself and the club as a whole has played no part in the fraudulent or dishonest conduct. 13.38 Protecting the member There are occasions when it will be proper to spend club funds on insurance premiums to obtain insurance cover in order to protect the member against third party tortious liability. A clear example relates to the activities of members who are referees and umpires in sports clubs.108 It would be a financial calamity for the member if as a rugby referee he was held liable in negligence in relation to a collapsed scrum which resulted in paraplegic injury to the hooker109 and he then faced the prospect of paying the damages out of his own monies. Indeed, we consider that the Committee might be in dereliction of its duties in managing the club’s affairs if it failed to consider the insuring of its members against claims for negligence, especially if it was common knowledge that the members’ activities, though lawful, entailed a risk of injury to persons or damage to property.

13.  Negligence and nuisance 13.39 The torts which are most likely to be of concern to a club are negligence and nuisance. The modern tendency has been to assimilate the two torts110 but the distinction should be highlighted. Negligence deals with the breach of duty of care which a person owes to others, whereas nuisance protects interests in the enjoyment of land. 13.40 Negligence Negligence is the tort of widest application because it is based on conduct rather than the protection of a particular interest such as a right of way. As was said by Lord Macmillan in the celebrated case of Donoghue v Stevenson111 (the snail-in-the-bottle-of-ginger-beer case), at 619, ‘the categories

107 See two old cases in point: Pinn v Rew (1916) 32 TLR 451 (defendant farmer held personally liable for injury caused to a person on the highway by one of his animals being driven to his farm where he employed only one drover as an independent contractor when the situation plainly called for more than one drover), ie a culpable omission; and M’Laughlin v Pryor (1842) 4 M & G 48 (defendant held personally liable for injury caused to a passenger in a pony gig where he had hired a coach and four horses driven by two postillions as independent contractors but then gave them instructions which caused a collision with the gig), ie a culpable commission. 108 See Appendix L for a set of rules which gives an express power to the committee to insure the activities of its members. 109 See Vowles v Evans [2003] EWCA Civ 318, cited in 13.53. 110 See the claims for both negligence and nuisance based on the same facts in Hunter v Canary Wharf Ltd [1997] AC 655. The defendant’s large tower block interfered with the BBC’s television transmission to local residsents and there was excessive dust from its construction site (see the brief description of the litigation in Network Rail Infrasructure Ltd v Williams [2018] EWCA Civ 1514, at [57]–[60] (Etherton MR)). See also Delaware Mansions Ltd v Westminster City Council [2001] UKHL 55. 111 [1932] AC 562.

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13.41  The Club’s Civil Liability to Third Parties of negligence are never closed’. In the same case Lord Atkin, at 580, made an oftrepeated statement of principle which is still applicable today: ‘The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.’ To this principle, which involves the concepts of proximity and foreseeability, is now added a caveat that the court also has to be satisfied that the imposition of a duty of care must be fair, just and reasonable.112 A further complication arises when a defendant is sued for causing pure economic loss; here the defendant’s duty of care is dependent on his voluntary assumption of responsibility.113 13.41 Examples Negligence is best understood through the medium of examples: (1) in Hilder v Associated Portland Cement Manufacturers  Ltd114 the defendant owned and occupied some grassland by its factory and allowed local children to play there. The boundary of this land was a low brick wall. Adjoining the land was a busy highway. A child kicked a ball over the wall which caused a rider to fall off his motorcycle and be killed. The defendant was held liable in negligence to the motorcyclist’s widow; (2)

in the New Zealand case of Evans v Waitemata District Pony Club115 all the club members were held liable in negligence for injuries caused to some paying spectators. The club had failed to provide a suitable number of convenient tethering places for the horses, and when two horses became frightened they broke free from their tether and started galloping wildly around the paddock;

(3) on the other hand, in Blake v Galloway116 the defendant was held not liable in negligence for the claimant’s serious eye injury caused by the throwing of a piece of tree bark during good-natured and high-spirited horseplay.117 This was because of the tacit understanding that the claimant impliedly consented to a risk of a blow to any part of his body, provided the object was thrown ‘without negligence and without intent to cause injury’.118 In other words, there is still a duty of care in horseplay but to found liability the claimant has to prove ‘recklessness or a very high degree of carelessness’.119 13.42 Nuisance The tort of nuisance is based on the interference by one occupier with the right in or enjoyment of land occupied by someone else. Two 112 Caparo Industries plc v Dickman [1990] 2 AC 605, at 617. 113 Customs & Excise Commissioners v Barclays Bank plc [2006] UKHL 28 (no duty of care owed by the bank to the claimant who had obtained a freezing injunction against the customers’ bank accounts and where the bank, after receiving notice of the injunction, negligently permitted the customers to withdraw large sums of money from the accounts). 114 [1961] 1 WLR 1434. 115 [1972] NZLR 773. 116 [2004] EWCA Civ 814. Likewise, see Orchard v Lee [2009] EWCA Civ 295 (where a 13-yearold schoolboy running backwards into the lunctime supervisor in a game of tag in the scool playground was not liable in negligence for the serious injury caused to her). 117 A friendly snowball fight would come into this category. 118 Blake v Galloway [2004] EWCA Civ 814, at [24] (Dyson LJ). 119 Ibid, at [16].

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Negligence and nuisance 13.44 points should be noted: first, there must be an escape from the defendant’s land to the claimant’s land and, secondly, it is a tort directed to the protection of interests in land so that a claim for death or personal injuries arguably falls outside the scope of this tort.120 The escape in question may be noise121 or unpleasant smells,122 or may simply be the causing of crowds to collect on your own land so that they spill over on to neighbouring land.123 It is said to be a tort of strict liability but the exact boundary between nuisance and negligence is now blurred because the modern tendency is to assimilate the two torts.124 13.43 Examples Nuisance is best understood through the medium of examples: (1) in Castle v St Augustine’s Links Ltd125 the plaintiff motorist‘s eye was seriously injured by a piece of glass from his windscreen which had been hit by a golf ball driven on to a busy highway from an adjoining golf links (such escape being a common occurrence) and he recovered damages in nuisance against the golf club; (2) in Kennaway v Thompson126 all the members of the Cotswold Motor Boat Racing Club were held liable in nuisance to a lakeside house owner in respect of their powerful and noisy racing boats on Whelford Lake; (3) in Tetley v Chitty127 all the members of the Medway Kart Club were held liable in nuisance for causing excessive noise to local residents from go-kart racing on Temple Marsh in Rochester, and the Medway Borough Council was held equally liable in nuisance because as landlord it had persisted in permitting the go-kart racing despite being warned about the noise nuisance; (4) in Coventry v Lawrence128 the respondents moved into a residential property near Mildenhall in Suffolk which was some 800 metres from a stadium where the appellant operators were already carrying on noisy motor activities, in respect of which activities they had planning permission. The Supreme Court held that this planning permission did not extinguish private rights in relation to noise nuisance but was relevant to remedies and in such circumstances a judge should consider an award of damages instead of an injunction. 13.44 Two difficult cases The problem relating to the overlap or assilimilation of the two torts is well demonstrated by the two following cases:

120 Transco plc v Stockport Metropolitan Borough Council [2004] 2 AC 1, at 10 (Lord Bingham). 121 Bellamy v Wells [1890] 60  LJ  Ch  156 (the proprietary Pelican Club, with some 1,200 members, held liable to nearby residents for noisy crowds in the street emanating from the club which had been attracted by the boxing contests frequently held on the club premises late at night); Soltau v De Held (1851) 2 Sim (NS) 133 (ringing of church bells); Hawley v Steele (1877) 6 Ch D 521 (use of common land for rifle practice and firing); Dunton v Dover (1978) 76 LGR 87 (playground noise). 122 Adams v Ursell [1913] 1 Ch 269 (fried fish shop). 123 Walker v Brewster (1867) LR 5 Eq 25 (crowds gathered on the plaintiff’s land caused by the defendant holding fêtes on his neighbouring property); Lyons, Son & Co v Gulliver [1914] 1  Ch  631,  CA (the defendant’s theatre crowds obstructing highway access to plaintiff’s nearby trading premises). 124 British Road Services  Ltd v Slater [1964] 1  WLR  498, at 504 (Lord  Parker  CJ); Goldman v Hargrave [1967] 1 AC 645, at 657 (Lord Wilberforce). A more recent example of this trend is the case of Delaware Mansions Ltd v Westminster City Council [2001] UKHL 55: see 13.46. 125 (1922) 38 TLR 615. 126 [1981] QB 88, CA. 127 [1986] 1 All ER 663. 128 [2014] UKSC 13.

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13.44  The Club’s Civil Liability to Third Parties (1)

an intriguing case, from a legal point of view, is Miller v Jackson.129 The Lintz Cricket Club, an unincorporated members’ club, in County Durham had been established about 1905. In about 1972 some new houses were lawfully built whose gardens abutted the cricket field. Cricket balls were hit into the gardens by batsmen. The club installed a high fence and then a higher fence but still eight or nine balls a year landed in the gardens or on the houses themselves. Mrs  Miller sued the members of the club in negligence and nuisance and at first instance obtained an injunction to prevent cricket being played and damages as compensation. On appeal the presiding judge, Lord Denning MR, held that there was negligence sounding in damages but that the established playing of cricket on this particular ground did not constitute a nuisance and he said that no injunction should be granted because an injunction was not an available remedy in negligence; the second judge, Lord Justice Lane, held that there was both negligence and nuisance sounding in damages and that the injunction should continue; and the third judge, Lord Justice Cumming-Bruce, held that there was negligence and nuisance sounding in damages but that no injunction should be granted as a matter of discretion. So Mrs Miller got £400 and the injunction was discharged. An interesting point is that Mrs Miller came to the nuisance but this did not disqualify her from complaining about the club’s activities,130 although this fact could be taken into account when it came to the question of remedy;131

(2) the above case should be contrasted with Bolton v Stone132 where Miss Stone had been hit on the head and injured by a cricket ball driven out of the ground of the Cheetham Cricket Club, an unincorporated members’ club in Manchester, when she had just stepped out from her garden gate on to the highway. The evidence was that balls had been hit out of the ground some six times in 28 years. Miss Bolton sued the members of the club in negligence and nuisance. The risk of harm was foreseeable but the chances were very small and so the club argued that it was reasonable to ignore the risk. Miss Bolton won in the Court of Appeal on the basis that all the members of the club were liable in negligence as occupiers of the ground in failing to prevent balls being hit out the ground. The House of Lords allowed the appeal on the more lenient basis that the Committee of the club was not negligent in failing to take precautions to prevent such a harmful accident.133 Lord Reid in the case of The Wagon Mound (No 2)134 attempted to clarify the position: ‘What that decision [Bolton v Stone] decided was to recognise and give effect to the qualification that it is justifiable not to take steps to eliminate a real risk if it is small and if the circumstances are such that a reasonable man, careful of the safety of his neighbour, would think it right to neglect it.’

129 [1977] QB 966. 130 Sturges v Bridgman (1879) 11 Ch D 852. 131 Kennaway v Thompson [1981] QB 88, CA, at 91. 132 [1950] 1 KB 201, CA and [1951] AC 850. 133 See also the interesting argument of Miss Stone’s counsel at [1951] AC 855, which relied on the strict variety of nuisance called Rylands v Fletcher liability (1868) LR 3 HL 330, but their lordships had dismissed this argument out of hand, as Lord Denning MR observed in Miller v Jackson, at 979. We harbour some doubts as to the rightness of this summary dismissal. 134 [1967] 1 AC 617, at 641.

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Negligence and nuisance 13.47 We regret that neither case gives clear guidance on a matter of practical importance to many clubs. 13.45 Access to the club and nuisance Sometimes a club has a right of way which is used as a means of access to the club. If the right is created by grant, the class of persons who are entitled to use it may be expressly defined or limited in the terms of the deed; but a grant of this nature must be construed, not strictly, but in accordance with the intention of the parties. Thus in Baxendale v North Lambeth Liberal and Radical Club135 the court held that the right of way granted to the club was exercisable by all persons lawfully going to and from the club, which included the members of the club, the associate members, tradespeople and employees of the club, and that this user was reasonable. If there is an excessive use of the right of way, however, it may become an actionable nuisance. 13.46 Land and buildings adjoining highways An occupier of land and buildings which adjoin or are close to a highway has an obligation not to use his land, or to allow his land or buildings to get into such a condition, so as to amount to a nuisance.136 Thus in Tarry v Ashton137 the occupier of a building was held liable in nuisance when the lamp attached to the building and overhanging the pavement fell down and injured a passer-by. A tree on the occupier’s land is not a nuisance merely because its branches overhang the highway,138 but if the overhanging branches hinder or obstruct the reasonable use of the highway, this will be a nuisance.139 The club may also be liable in nuisance for damage caused to neighbouring property by the encroaching roots of its tree; the principle here ‘can be summed up in the proposition that, where there is a continuing nuisance of which the defendant knew or ought to have known, reasonable remedial expenditure may be recovered by the owner who has had to incur it’.140 13.47 Occupier’s liability in negligence At common law an occupier’s liability was based on the tort of negligence. In 1957 the Occupiers’ Liability Act was passed whereby a ‘common duty of care’ was substituted for the common law rules.141 Section 2 of the Act states: ‘(1) An occupier of premises owes the same duty, the ‘common duty of care’, to all his visitors, except insofar as he is free to and does extend, restrict, modify or exclude his duty to any visitors by agreement or otherwise. (2) The common duty of care is a duty to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.’ 135 [1902] 2 Ch 427. 136 Eg see the cases of Castle, Kennaway and Tetley cited in 13.43. 137 (1875–76) 1 QBD 314. 138 Noble v Harrison [1926] 2 KB 332. 139 Hale v Hants and Dorset Motor Services [1947] 2 All ER 628. 140 Delaware Mansions  Ltd v Westminster City Council [2002] 1  AC  321, at 335 (Lord  Cooke of Thorndon); Berent v Family Mosaic Housing [2012]  EWCA  Civ 961. See also Network Rail Infrastructure Ltd v Williams [2018] EWCA Civ 1514, where two owners were awarded damages in nuisance for the diminished value of their properties against the rail company on whose adjoining property grew the invasive Japanese knotweed, even though it had not yet invaded their grounds. 141 Occupiers’ Liability Act 1957, s 1(1).

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13.48  The Club’s Civil Liability to Third Parties 13.48 Who is an occupier The 1957 Act does not define an occupier and so the pre-1957 rules govern this point.142 It includes owner-occupiers143 and lessees144 and other persons provided they have sufficient control over the premises to ensure their safety and to appreciate that a failure on their part to use care may result in injury to a person coming on them.145 If the club were to hire out its premises for a particular occasion to a third party we consider that it would still remain the occupier for the purposes of the Act although, in the absence of an express term in the hiring, the club does not warrant the premises are suitable for the purpose for which they are hired.146 Conversely, we consider that the club would not become the occupier of premises which it hired from someone else for its own club activities. 13.49 An unincorporated members’ club cannot be held liable as occupier because it is not a legal person.147 If the club premises are vested in trustees, it is they who will be treated as occupiers and who will be the defendants to any action.148 But what happens in the case of a club which has no trustees but which is as a matter of fact in occupation of premises? The members as a whole may be considered the occupiers,149 and Lord  Justice Hutchison in Hibernian Dance Club v Murray150 stated that there was a strong arguable basis for joining Committee members of an unincorporated member’s club in a representative capacity (ie on behalf of all the members) in a personal injuries claim based on occupier’s liability. But this basis raises many questions. If the whole membership is to be treated as the occupier, does this include the full member living permanently overseas in New York? If yes, this is bizarre. If no, would this member count temporarily as an occupier when he was staying at the club in England and a visitor was injured on the club premises? What about a member who lives in England but who is posted abroad for a two-year tour of duty in Buenos Aires? Does he remain an occupier for that period? Or take another example. The MCC has some 18,000 full members and the club owns Lord’s Cricket Ground. Assuming there were no trustees, can it really be said that the ground is occupied by all 18,000 members?151 Given these vagaries and bearing in mind the House of Lords dictum about the need for persons with sufficient control to ensure safety,152 we submit that there is only one feasible answer, namely, that the occupation of club premises goes hand-in-hand with control of the club’s affairs, and therefore the members of the committee in the ordinary course of events will be the occupiers in an unincorporated members’ club and liable accordingly.153

142 Clerk and Lindsell on Torts (22nd edn, 2018) at 12-08. 143 Ibid, 12-09. 144 Wheat v E Lacon & Co Ltd [1966] AC 552, at 577–579 (Lord Denning), but it excludes the landlord even if he has undertaken the obligation to repair. The landlord, however, may have other duties under the Defective Premises Act 1972: see 15.30. 145 See Wheats’ case, above, at 579. 146 Wheeler v Trustees of St Mary’s Hall, Chislehurst (1989) Times, 10 October. 147 Verrall v Hackney Borough Council [1983] QB 445, CA, at 461. 148 Clerk and Lindsell on Torts (22nd edn, 2018) at 12–13. 149 Bolton v Stone [1950] 1 KB 201, CA discussed in 13.44(2). 150 [1997] PIQR 46, at 55. 151 MCC is now an incorporated body: see 1.8. 152 See 13.47. 153 Pace Clerk and Lindsell on Torts (22nd edn, 2018) at 12–13, which states that the committee members in an unincorporated members’ club do not have any liability as occupiers, citing in support Robertson v Ridley [1989] 1 WLR 872, CA, but this case is very weak authority for this proposition: see 5.63.

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Negligence and nuisance 13.52 13.50 Who is a visitor The duty of care is owed to visitors but the Occupiers’ Liability Act 1957 does not define a visitor and so the pre-1957 rules govern this point too. Visitors are those who would have been treated as invitees or licensees at common law. Permission to enter the club premises may be express or implied. Permission to enter may be given by an employee of the occupier but what if the employee had no authority to give permission to enter or, worse still, gave permission contrary to his instructions? The answer lies in the application of the rules relating to vicarious liability.154 One curious point should be noted. An independent contractor (eg a builder) may be an occupier of club premises as well as the club itself.155 Suppose the builder contrary to the club’s instructions invites a person on to the premises who is then injured. Is that person a visitor or trespasser? The answer is that he will be a trespasser vis-à-vis the club but a visitor vis-à-vis the builder and liability will be decided accordingly.156 13.51 Whether a visitor remains a lawful visitor on club premises for the entirety of his stay can raise nice points of argument. A licence to enter is often a restricted one, that is, limited to those parts which it may be reasonably supposed the visitor will go. A  visitor who strays into other parts of the club, say the kitchen, and is injured there may find himself without remedy,157 although an involuntary or accidental straying will not convert a lawful visitor into a trespasser.158 Further, a visit to a club would normally include an invitation to use the lavatory and a visitor remains a lawful visitor if he strays whilst making a reasonable search for it.159 A licence to enter can always be revoked, but a visitor does not become a trespasser until he has had a reasonable time in which to leave.160 13.52 Trespassers At common law a trespasser going on to other people’s property did so at his own risk.161 But trespassers are not all malevolent and a rambler or a child might innocently wander on to someone’s land and injure himself. So in 1984 another Occupiers’ Liability Act was passed whereby a limited statutory duty of care replaced the common law rules. An occupier owes a duty of care to trespassers if: (a) he is aware of any danger on his property or has reasonable grounds to believe it exists; (b) he knows or has reasonable grounds to believe that trespassers may be in the vicinity of the danger; and (c) the danger poses a risk against which he may reasonably be expected to offer some protection.162

154 See 13.32. 155 Wheat v E  Lacon &  Co  Ltd [1966]  AC  552; AMF  International  Ltd v Magnet Bowling  Ltd [1968] 1 WLR 1028, at 1052. 156 Ferguson v Welsh [1987] 1 WLR 1553. 157 Lee v Luper [1936] 3 All ER 817; Mason v Langford (1888) 4 TLR 407. 158 Braithwaite v South Durham Steel Co [1958] 1 WLR 986. 159 Gould v McAuliffe [1941] 2 All ER 527 and see now Spearman v Royal United Bath Hospitals NHS Foundation Trust [2017] EWHC 3027 (QB) (where the hospital was liable to a confusedstate patient for his injuries when falling off a roof after his walking through an unsecured door in the A & E department, in that he was held not to be a trespasser on the roof). 160 Robson v Hallett [1967] 2 QB 939. And see Stone v Taffe [1974] 1 WLR 1575, CA and Gibson v Douglas [2016] EWCA Civ 1266. 161 Robert Addie & Sons (Collieries) Ltd v Dumbreck [1929] AC 358 (defendant had no liability to trespassing child killed by unguarded machinery). But see British Railways Board v Herrington [1972] AC 877 (where the House of Lords held that landowners did in fact owe a limited duty of care to trespassers). 162 Occupiers’ Liability Act 1984, s 1(3). See the trio of trespassing swimmers’ cases: Ratcliff v McConnell [1999] 1 WLR 670; Donoghue v Folkestone Properties Ltd [2003] EWCA Civ 231; Tomlinson v Congleton Borough Council [2003] UKHL 47.

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13.53  The Club’s Civil Liability to Third Parties 13.53 Sports and negligence Many clubs are sports clubs whose activities include the playing of physically competitive sports such as rugby football. These activities should command the special attention of the managing committee (and of course the attention of the governing body of the sport in question). The sports rules will be framed so as to minimise the element of danger and the risk of physical injury. In Vowles v Evans163 the claimant was an amateur rugby player with the Llanharan Rugby Football Club; he was playing in a match as hooker when the scrum collapsed, causing him serious injuries which rendered him paraplegic.164 He sued the referee, the Welsh Rugby Union (who conceded they were vicariously liable for the referee whom they had appointed) and the chairman and secretary of his club. The referee and the Union were found guilty of negligence, but not the club. The Court of Appeal, upholding the judge, approved, at 1615, the general statement of law put forward by Gleeson  CJ in an Australian case also involving rugby football, Agar v Hyde,165 as follows: ‘After all, opposing players can already sue each other for intentionally and negligently inflicted injuries;166 they can sue the referee for negligent failure to enforce the rules; and the sports administrator that dons the mantle of an occupier assumes well established duties of care towards players, spectators and (in the case of golf clubs) neighbours. A  duty of care is not negated merely because participation in the sport is voluntary.’ 13.54 In Smoldon v Whitworth,167 another case of an injured hooker, the Court of Appeal explained the nature of the referee’s duty to the players; Lord Bingham of Cornhill CJ stated, at 139: ‘The level of care required is that which is appropriate in all the circumstances, and the circumstances are of crucial importance. Full account must be taken of the factual context in which a referee exercises his functions, and he could not be properly held liable for errors of judgment, oversights or lapses of which any referee might be guilty in the context of a fast-moving and vigorous contest. The threshold of liability is a high one. It will not be easily crossed.’ The important message of the above cases is that clubs should make sure that referees and umpires who control their games and matches are properly trained, graded and appointed, and also properly insured in respect of their activities. 13.55 As regards the players themselves, the important message for the club is that it should instil into its membership a desire to win, but not to win at all costs, and club rules should be framed to cater for unacceptable behaviour in a game or competition. In contact sports the players consent to accidental injury, 163 [2003] EWCA Civ 318. 164 His primary complaint against the referee was his failure to insist on non-contestable scrummages on finding that there was no specialist prop forward to replace an injured prop forward. For an example concerning a cricket umpire see Bartlett v English Cricket Board Association of Cricket Officials [2015] 8 WLUK 301 a County Court decision in which an injury was held to be the result of the claimant’s incorrect fielding technique and not of a faulty pitch inspection by the umpires. 165 (2000) 201 CLR 552. 166 Condon v Basi [1985] 1 WLR 866, CA. 167 [1996] EWCA Civ 1225 and see Bartlett v English Cricket Board Association of Cricket Officials quoted in footnote 164.

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Negligence and nuisance 13.56 even if perhaps it causes serious injury, but players do not consent to deliberate or recklessly caused injury,168 which may justifiably result in disciplinary action being taken by the club against the offending player. 13.56 Safety of spectators Apart from the question of the occupiers’ liability169 and the question of the safety of players,170 there is the allied question of spectators’ safety which should command the attention of managing committees. One starts off with the proposition that spectators who come to watch sports or competitions will appreciate that watching may involve a risk that they may be injured. Although it may not be possible to eradicate every element of danger, spectators are entitled to assume that the club in permitting spectators has given proper thought to their safety. In Hall v Brooklands Auto Racing Club171 the spectator-plaintiff was injured when two cars, travelling at some 100mph, nudged one another and caused one vehicle to somersault and fall into the spectators’ enclosure. There was nothing wrong with the track or the barriers and no accident like it had happened in the 23 years of the existence of the defendant club owner. The plaintiff lost his action in negligence against the club. Likewise, in Wooldridge v Sumner172 the spectatorplaintiff lost his action in negligence against the horseman of experience and skill in respect of injuries suffered when his galloping horse deviated from the course and knocked down the plaintiff.173 In that case Lord Justice Sellers, at 56, said: ‘But provided the competition or game is being performed within the rules and the requirement of the sport and by a person of adequate skill and competence the spectator does not expect his safety to be regarded by a participant.’ That principle was expressed by Lord Justice Diplock in the same case, at 68, as follows: ‘A  person attending a game or competition takes the risk of any damage caused to him by any act of a participant done in the course of and for the purpose of the game or competition notwithstanding that such act may involve an error of judgment or a lapse of skill, unless the participant’s conduct is such as to evince a reckless disregard of the spectator’s safety.’174 Obtaining insurance to guard against the risk of injury to spectators is also sensible; the risk of injury may be small but the potential damages may be great and the smallness of the risk will no doubt be reflected in the amount of the insurance premium.

168 R  v Barnes [2004] EWCA Crim 3246; R  v Brown [1994] 1  AC  212, at 262 and 265 (Lord  Mustill). Boxing is an exception to the rule that it is unlawful to inflict intentional harm on one’s opponent. 169 See 13.47. 170 See 13.53. 171 [1933] 1 KB 205, CA. 172 [1963] 2 QB 43, CA. 173 The plaintiff had also unsuccessfully sued the British Horse Society under the Occupier’s Liability Act 1957. 174 See also Wilks v Cheltenham Homeguard Motor Cycle and Light Car Club [1971] 1 WLR 668, CA (where the spectator-plaintiff unsuccessfully sued a motorcyclist for negligently injuring him during a motorcycle scramble when the motorcyclist inexplicably left the course and went into the spectators).

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13.57  The Club’s Civil Liability to Third Parties 13.57 Contributory negligence Where a club is found to be in breach of a duty of care, the fact that the claimant’s own negligence contributed to the damage in question will result in an apportionment of damages according to the fault on either side.175 In other words, the claimant will have failed to take reasonable care for his own well-being or safety and thus contributed to his own damage.176 This doctrine will apply to cases in the tort of negligence177 and in the tort of nuisance178 but, generally speaking, it does not apply where the wrongdoing has been intentional.179 13.58 Exclusion of liability It will be recalled from 13.44 that an occupier can exclude or restrict his liability to his visitors ‘by agreement or otherwise’. A  suitably worded disclaimer of liability in an appropriate place or document, whereby the occupier gives explicit warning of a danger, may suffice in discharging the occupier’s duty of care.180 Exclusion of liability for negligence is permissible but may be subject to the restrictions set out in the Unfair Contract Terms Act 1977181 or the Consumer Rights Act 2015. Business occupiers (which might be a club182) are prohibited from excluding or restricting their liability (including quantum of loss)183 for death or personal injury184 and can only exclude or restrict their liability for damage to a visitor’s property if the contract or the notice satisfies the requirement of reasonableness.185 Residential or private occupiers are exempt from these provisions, save where the visitor contracts on the occupier’s ‘written standard terms of business’: here any exclusion or restriction of liability (including quantum of loss)186 must satisfy the requirement of reasonableness.187

14. Defamation 13.59 Club’s liability for defamation The tort of defamation consists of the unauthorised publication of libellous or slanderous statements to a third party. In broad terms the distinction between libel and slander is that libel is defamation in permanent form (eg written words) whereas slander is in transitory form (eg spoken words).188 A defamatory statement is one which is untrue and likely to disparage in a substantial way a third person; in other words, it is the tort which protects one’s reputation and good name. What amounts to a defamatory statement is hard to pin down. Generally speaking, if the words complained of cause a person to be 175 Law Reform (Contributory Negligence) Act 1945, s 1. 176 Nance v British Columbia Railway [1951] AC 601, PC, at 611 (Lord Simon). 177 Clerk & Lindsell on Torts (22nd edn, 2018) at 3–64. 178 Trevett v Lee [1955] 1 WLR 113, CA, at 122 (Evershed MR). 179 Clerk & Lindsell on Torts (22nd edn, 2018) at 3-64–3-67. 180 White v Blackmore [1972] 2 QB 651, CA, at 670 (Buckley LJ) and 674 (Roskill LJ) (where the widow of a spectator, killed at a jalopy car racing circuit by reason of the defective arrangement of ropes fencing off the track, lost her action because of a notice absolving the organisers from liability for personal injury, fatal or otherwise, ‘howsoever caused to spectators’). Lord Denning MR, at 659, delivered a powerful dissenting judgment. 181 Unfair Contract Terms Act 1977, s 1(3)(b). Despite its title the Act deals with exclusion of tortious liability as well as exclusion of contractual liability. 182 See footnote 54 in 13.19. 183 Unfair Contract Terms Act 1977, s 11(4). 184 Ibid, s 2(1). 185 Ibid, s 2(2). 186 Ibid, s 11(4). 187 Ibid, s 3(2). 188 Gatley on Libel and Slander (12th edn, 2013, 2nd supp, 2017) at 1.5.

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Defamation 13.61 hated, despised or ridiculed, or cause others to shun or avoid him, or to lower him in the estimation of other, right-thinking persons, they can be said to be actionable statements.189 Times change, and whereas in 1846 it was held defamatory of a person to publish a statement that he had been blackballed on seeking admission to a club,190 such a statement might not be considered defamatory today, as the common law adapts to social change.191 In a case redolent of the attitudes of its time, it was held in Robinson v Jermyn192 that it was not necessarily defamatory for the proprietors of the Cassino Club193 in Southwold in Suffolk to post a notice in the club in that the two plaintiffs had been excluded from a particular room in the club, ‘not being persons that the proprietors or the annual subscribers think it proper to associate with’. The court said that the notice did not mean that these persons were unfit for general society (which was the substance of the plaintiffs’ allegation) but only unfit as members of that club. 13.60 The Defamation Act 2013 came into force in 2014. According to Lord Sumption in Lachaux v Independent Print Ltd194 the Act sought ‘to modify some of the commom law rules which were seen unduly to favour the protection of reputation at the expense of freedom of expression’. In round terms, the Act consolidated or modified the law of defamation as follows: (1) a statement is not defamatory unless it caused or is likely to cause ‘serious harm’ to one’s reputation;195 (2) there is now a defence of ‘substantial truth’ (which replaced the defence of ‘justification’);196 (3) there is now a defence of ‘honest opinion’ (which replaced the defence of ‘fair comment’);197 (4)

there is a new defence of reasonable and actual belief that the publication of facts or opinions was a matter of public interest;198

(5) there is a new defence for website operators in respect of statements published online by others without malice by the website operator.199 13.61 What would happen if the club’s secretary had circulated a written notice to the local newspapers that wrongly stated that the plaintiff had been expelled from membership of the club for misconduct?200 In essence, a defence will lie if the defendant shows that the statement is substantially true or the defendant can make a plea of ‘honest opinion’ (that is, he agrees the statement is or may be defamatory

189 Gatley on Libel and Slander (12th edn, 2013, 2nd supp, 2017), at 1.7. 190 O’Brien v Clement [1846] 16 M & W 159. 191 Gatley on Libel and Slander (12th edn, 2013, 2nd supp, 2017), at 2.19. 192 (1814) 1 Price 11. 193 Cassino (or casino) was a popular card game in the early 19th century for four players in which players matched cards in hand with others exposed on the table and in which the ten of diamonds, known as the great cassino, was worth two points and the two of spades, known as the little cassino, was worth one point. 194 [2019] UKSC 27. 195 Defamation Act 2013, s 1. 196 Ibid, s 2. 197 Ibid, s 3. 198 Ibid, s 4. 199 Ibid, s 5. And see 13.64. 200 As happened in Birne v National Sporting League (1957) Times, 12 April.

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13.62  The Club’s Civil Liability to Third Parties but the words complained of are honest opinion or a matter of public interest);201 or the defendant can make a plea of privilege (that is, he agrees that the statement is or may be defamatory but he asserts that he had a legitimate interest or duty in publishing the statement and the person to whom it was communicated had a corresponding interest or duty to receive it). Unless it is covered by ‘absolute’ privilege, the privilege referred to is ‘qualified’ because it can be destroyed by malice (that is, knowingly abusing the privileged occasion; in effect an allegation of dishonesty against the maker of the statement). Even after the enactment of the Defamation Act 2013, these defences remain fairly technical. The offer to make amends introduced by the Defamation Act 1996 which came into effect on 28 February 2000 should also be noted. This may be pleaded by way of defence.202 13.62 Publication on the club’s noticeboard The committee should beware of posting potentially contentious notices in the clubhouse, say that named members are defaulters in the payment of their subscriptions. This may well be a hostage to fortune since one or more of the non-payers may take umbrage and cause a row in the club or they may assert that the notice is an incorrect and defamatory statement. Notice of default is best sent direct to the home of the member in question so that there is no question of publication to third parties.203 It is not unknown too for a mischievous or an aggrieved member to put up on a club notice board a derogatory statement, say, about a fellow member with whom he has fallen out or whom he thinks is carrying on an improper relationship with his wife. Let us assume the notice is both defamatory and libellous. Is the club or the Committee in any way liable to the member who has been defamed? The answer is set out in the next paragraph. 13.63 If it had no idea that the derogatory statement had been put on the club notice board but subsequently became aware of it, the Committee up to the time of its knowledge of the statement will have the defence of innocent dissemination.204 But is the Committee then liable if it does nothing about it and lets the statement remain on the club notice board? The answer is that once the Committee has become aware of the statement, it will have a reasonable opportunity to check its contents before deciding whether to remove the statement.205 If the Committee then decide to let it stay, and it subsequently turns out to be libellous, the Committee will have been guilty of authorising its publication, and therefore liable to the defamed member.206 The removal of the statement is the safest course if there is the slightest risk of its being defamatory. 13.64 Publication on the club’s website Many clubs have websites which contain information about activities and persons within the club. It is for the Committee to supervise and monitor the situation to ensure that the website 201 See Defamation Act 2013, ss 2 and 3. 202 Defamation Act 1996, ss 2-4 and CPR 53.1–53.3. 203 If the rules stipulate that there will be automatic cessation of membership on the grounds of arrears of subscription (see, eg model rule 19(4) in Appendix K), it would not be improper, although unusual, to post a notice in the clubhouse that a particular person had ceased to be a member since the members are entitled to know who are their fellow members at any given time, but it would be wise for the notice simply to state that the person had ceased to be a member without further elaboration. 204 Defamation Act 1996, s 1; Gatley on Libel and Slander (12th edn, 2013, 2nd supp, 2017) at 6.20. 205 Gatley on Libel and Slander (12th edn, 2013, 2nd supp, 2017), at 6.26. 206 Godfrey v Demon Internet Ltd [2001] QB 201.

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Incorporated clubs: general principles of liability 13.66 is being used responsibly. The Defamation Act 2013 created a new defence for operators of websites where a defamation action is brought against them in respect of a statement posted on its website.207 It is a defence if the operator can show that they did not post the statement on the website.208 However, this defence will be defeated if the claimant can show that it was not possible for him to identify the person who posted the statement after he had given a notice of complaint and the operator had failed to respond to the notice either properly or at all.209 13.65 Litigation210 An action for libel will not lie against an unincorporated members’ club in its collective name since it does not constitute a legal person whereby it can publish or authorise the publication of a libel.211 (For the same reason such a club cannot bring a libel action against somebody.212) The persons who will be liable are those who authorised or directed its publication.213 In Birne v National Sporting League,214 the plaintiff-bookmaker had been expelled from the league but wrongfully so. The secretary of the league published the fact of expulsion. The judge found the secretary had acted with malice on a privileged occasion and the committee and the proprietor of the league were held liable to the plaintiff because they had given the secretary a free hand and the principals were liable for the malice of their agent. On the other hand, in Longdon-Griffiths v Smith215 the four trustees of the National Deposit Friendly Society published on a privileged occasion a report which was defamatory of the plaintiff, who was the society’s general secretary. One of the trustees was actuated by malice. This did not destroy the privilege of the other three trustees. The case of Egger v Viscount Chelmsford216 involved the Kennel Club, which is an unincorporated members’ club. The secretary of the club’s show regulations committee published a letter defamatory of the plaintiff. Here five members of the Committee were held to have been actuated by malice but not the remaining four members whose defence of qualified privilege succeeded.217 In addition, the secretary who wrote the letter was not guilty of malice and this was an independent defence since an innocent agent is not liable for the malice of his principal.

15.  Incorporated clubs: general principles of liability 13.66 Community club Insofar as the club is a legal person, the member’s liability in tort is akin to that of a company club save that community clubs will have no directors but instead officers and members.

207 Defamation Act 2013, s 5(1). 208 Ibid, s 5(2). 209 Ibid, s 5(3). 210 See Chapter 19 for matters of procedure in connection with litigation. 211 London Association for the Protection of Trade v Greenlands [1916] AC 15. 212 Electrical, Electronic, Telecommunication and Plumbing Union v Times Newspapers  Ltd [1980] QB 585. 213 Mercantile Marine Service Association v Toms [1916] 2 KB 243, CA, at 246–247 and see now Defamation Act 2013, ss 8 and 15. 214 (1957) Times, 12 April. 215 [1951] 1 KB 295. 216 [1965] 1 QB 248, CA. 217 It is important to realise that the four innocent committee members were not tortfeasors at all; the privilege attaches to the individual publisher, not to the publication.

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13.67  The Club’s Civil Liability to Third Parties 13.67 Company club218 The basic principles of law set out in 13.30, which apply to determine the tortious liability of the members of an unincorporated members’ club, will apply to a company club as follows: (1)

the first proposition does not apply;

(2)

the second proposition fully applies;

(3)

the third proposition needs to be reformulated as follows: ‘the club being a legal person, and to the exclusion of the members, will potentially be vicariously liable for the acts or omissions of those persons, whether employees or members of the club, who were acting in the course of their employment or acting in a manner authorised by the club’;

(4) the legal personality of a company club makes a substantial difference in defamation cases: see 13.71. The topic of vicarious liability is dealt with in 13.32–13.36 followed by the description of the torts of negligence and nuisance (see 13.39) and defamation (see 13.59). 13.68 Community interest company The situation is the same as for a company club. 13.69 Charitable incorporated organisation The situation in relation to an Association CIO is basically the same as for a company club.

16.  The director’s liability 13.70 In normal situations it is the club which will be liable for any tort committed and the director will have no liability219 but there are exceptions. The director will be personally liable (as well as the company) if he makes a fraudulent misrepresentation on behalf of the company.220 And if a director exercises control other than through the board of directors, he may become a joint tortfeasor with the company.221 13.71 Defamation In Electrical, Electronic, Telecommunication and Plumbing Union v Times Newspapers Ltd222 Mr  Justice O’Connor put the legal position succinctly in respect of a corporate body suing for libel: ‘So you have got to [have legal] personality which is capable of being defamed before a plaintiff can bring an action for libel. Of an individual there is no difficulty; so too a corporate body. That is an extensive term which is just

218 This category will include the relevant clubs which are CASCs or come within the Literary and Scientific Institutions Act 1854. 219 Williams v Natural Life Health Foods [1998] 1 WLR 830, HL. See Gore-Browne on Companies (45th edn, looseleaf) at 7A[1] and 7[13]–[14] for a discussion on this topic. 220 Standard Chartered Bank v Pakistan National Shipping Corporation (Nos  2 and 4) [2002] UKHL 43. 221 MCA Records Inc v Charly Records Ltd [2001] EWCA Civ 1441 (director successfully sued on a personal basis for procuring breaches of copyright by his company). 222 [1980] QB 585, at 595.

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Proprietary clubs 13.72 as well to have in mind. Corporate bodies are of a very much wider variety than most people think. The obvious example with which we are all familiar is a limited company, but there are a wide variety of corporate bodies which have been set up by charter, by special Act of Parliament, by letters patent and so forth, and they all have corporate existence; and again, the law is clear, that a corporate body has a personality which can be defamed and it can bring an action in its own name for the libel on itself.’223 By the same reasoning a company club can be sued for any libel which it has published or authorised to be published.

17.  Proprietary clubs 13.72 Apart from the individual member who is the actual tortfeasor and liable as such (see the second proposition in 13.30), it is the proprietor who shoulders the burden of vicarious liability, not the members or the Committee of a proprietary club.

223 See British Chiropractic Association v Singh [2010] EWCA Civ 350, at [10].

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Chapter 14

Third Party Challenges to Club’s Decisions

1. Introduction 14.1 There are a number of occasions when a third party who is not a member of the club is affected by a decision taken by the club. The decision may adversely affect his standing in the community or his lifestyle or his means of livelihood, and he may therefore wish to challenge the club’s decision. This is therefore an important topic which contains a number of complexities when trying to find the right answer to any given problem. This chapter applies to all clubs, no matter into what category they fall. 14.2 The Jockey Club, which was an unincorporated members’ club until its incorporation by royal charter in 1970, controlled both flat and steeplechase horseracing throughout Great Britain until 2007. The club then permanently divested itself of its powers by giving them to an independent incorporated entity called British Horseracing Authority Limited, which now governs and regulates the sport of horseracing. In the past the Jockey Club itself made the rules of horseracing; sanctioned the holding of race meetings; issued trainers’ licences; and had disciplinary powers as the governing body of horseracing. The club provides useful examples of the various challenges made to its decisions by third parties and we surmise that they would still be of relevance to present-day challenges to the decisions of the British Horseracing Authority: (1) In Chapman v Ellesmere1 the plaintiff was a racing steward who acted under a licence from the Jockey Club. He was unable to sue the members of one of the club committees for defamation in respect of their publication of a report on his role in a particular race. This was because in accepting his licence he had agreed to rules under which the publication of such a report was specifically permitted. (2) In Russell v Duke of Norfolk2 the plaintiff was a trainer whose licence was withdrawn by the club’s stewards ‘in their absolute discretion’ and then published the fact of withdrawal in its Racing Calendar. Mr  Russell unsuccessfully sued for damages for breach of contract and libel.

1 2

[1932] 2 KB 431. [1949] 1 All ER 109.

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14.2  Third Party Challenges to Club’s Decisions (3) In Nagle v Fielden3 the plaintiff was a very experienced woman trainer who was refused a trainer’s licence based on the club’s stewards’ unfettered discretion but in reality because she was a woman. The court allowed her case to go to trial on the ground that the practice of refusing a trainer’s licence to a woman might be void as being contrary to public policy. In R v Jockey Club, ex  p  RAM  Racecourses4 Mr  Justice Simon Brown commented, at 248, that since Mrs Nagle had no contract with the Jockey Club, it was not a case of an improper contract in restraint of trade but instead involved considerations of public law. (4) In R v Disciplinary Committee of the Jockey Club, ex p Massingberd-Mundy5 the applicant challenged the club’s disciplinary committee’s decision to remove his name from the list of those eligible to sit as chairmen of local panels of stewards. The court held that Mr  Massingberd-Mundy enjoyed a nonrenewable privilege which was a domestic decision not capable of judicial review, although Mr  Justice Roch, at 224, did consider that if the Jockey Club’s disputed decision did not arise, or not wholly arise, from contract, then judicial review might lie. (5) In R v the Jockey Club, ex p RAM Racecourses Ltd6 the club accepted publicly a report it had commissioned that 60 additional fixtures should be made available in 1990 and 1991, including allocations to new racecourses. The applicant established a new racecourse and sought an allocation of 15 fixtures which the club declined to make. On an application for judicial review the court held that the applicant had no legitimate expectation of any allocation and dismissed the application, although Lord  Justice Stuart-Smith, at 243, said he did not rule out such an application in appropriate circumstances, eg where the club had made an unambiguous statement to anyone seeking to open a new racecourse that they would be allocated a certain number of fixtures. (6) In R v Disciplinary Committee of the Jockey Club, ex p The Aga Khan7 the Aga Khan’s winning filly was disqualified by the club’s disciplinary committee and his trainer fined. The court held that the Aga Khan’s legal position was governed by his contract with the Jockey Club and was a matter of private law not involving any public law principles, and so they dismissed his application for judicial review. Lord Justice Hoffmann, at 933, commented, ‘I do not think one should try to patch up the remedies available against domestic bodies by pretending that they are organs of government’. (7) In Bradley v The Jockey Club8 the claimant had been a licensed and successful steeplechase jockey between 1982 and 1999, and was now carrying on business as a bloodstock agent. He was charged with providing confidential information whilst a jockey to a betting syndicate in breach of the Rules of Racing and he was disqualified as a jockey for several years by the club’s Disciplinary Committee. The club’s independent Appeal Board (whose panel consisted of judges, former judges or senior lawyers) dismissed his appeal.

3 4 5 6 7

[1966] 2 QB 633, CA. [1993] 2 All ER 225, CA. [1993] 2 All ER 207, CA, a case decided in December 1989. [1993] 2 All ER 225, CA, a case decided in March 1990. [1993] 1 WLR 909, CA. Applied in another Jockey Club case, R (Mullins) v Appeal Board of the Jockey Club (No 1) [2005] EWHC 2197 (Admin). 8 [2004] EWHC 2164 (QB).

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Decisions made under an express contract 14.4 The disqualification meant the end of his career as a bloodstock agent, and Mr  Bradley brought proceedings in the High Court on the basis that the penalty was disproportionate and unlawful. There was a dispute as to the jurisdiction of the court and Mr  Justice Richards held that: (a) the correspondence passing between Mr Bradley and the club in 2002 gave rise to a fresh contractual relationship; and (b) whether the relationship between Mr Bradley and the club was contractual or non-contractual, the court had a supervisory role in checking to see whether the tribunal had acted unfairly; or had misdirected itself; or had had no evidential basis for its decision. Mr Bradley’s challenge was unsuccessful. 14.3 In challenging the decision the third party will be involved in one of three possible relationships: (1)

express contract: there exists an express contract between the club and the third party;

(2)

implied contract: the third party has consensually submitted to the jurisdiction of the club;

(3)

absence of agreement: no contract nor consensual submission exists as between the club and the third party.

As to the Jockey Club cases referred to in 14.2, items (1), (2), (4) and (6) fell within the first category; item  (7) fell within the first category, alternatively the second category; item (3) fell within the second category, alternatively the third category; and item (5) fell within the third category.

2.  Decisions made under an express contract 14.4 These present no difficulty from a legal point of view. If the decision which is being challenged arises in the course of an express contract made between the club and the third party, the normal rules of the law of contract will apply. Here we are in the realm of private law rights. As the Court of Appeal said in the Aga Khan case,9 if the third party has a contract with the club, he will normally be restricted to making his challenge under the terms of this contract, not in the wider realm of public law.10 And the courts do not exist as a ‘court of appeal’ at the behest of a third party in relation to unpalatable decisions made by the club.11 The court will only intervene where the decision has involved some dishonesty, bias or caprice on the part of the club12 or where the decision was plainly beyond the powers of the club.13

9 [1993] 1 WLR 909 10 See Chambers v British Olympic Association [2008] EWHC 2028 (QB), at [38] where Mackay J  refused to grant an injunction temporarily suspending for the duration of the 2008 Olympics a lifetime ban under the defendant’s bye-laws by reason of the claimant’s earlier drug-taking. (In 2012 the Court of Arbitration in Sport held that this lifetime ban was illegal, so that the claimant was eligible to take part in the 2012 Olympics). 11 Currie v Barton (1988) Times, 12 February, CA. 12 McInnes v Onslow-Fane [1978] 1 WLR 1520, at 1535 (Megarry V-C). 13 Davis v Carew-Pole [1956] 2 All ER 524, at 527.

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14.5  Third Party Challenges to Club’s Decisions 14.5 Rules of natural justice The rules of natural justice are set out in 7.20. They indubitably apply to decisions made by the club which are challenged by the club member. Whether the court will intervene in a contractual or domestic dispute between the club and a third party, if the latter complains of a breach of the rules of natural justice at the hands of the club, is still an uncertain area of the law. The formal introduction into English law of the European Convention on Human Rights under the Human Rights Act 1998 is part of a process which by and large has made the courts more willing to entertain claims by third parties that a club has acted unfairly towards them. If a court challenge by a third party is permitted, various questions arise: (1) Did the claimant have a legitimate expectation that he would be consulted before the club’s decision was made? (2)

Was the claimant entitled to an oral hearing before any decision was made?

(3) If so, would the claimant have been allowed legal representation at that hearing? (4)

Was the club as decision maker obliged to give reasons for its decision?

(5)

If so, does the decision maker have a fixed or usual practice or policy? If yes, how inflexible is it?

In Ridge v Baldwin14 the House of Lords said that the overall test was: What would a reasonable man consider to be fair in the particular circumstances? But this begs the question: What is fair? The answer would appear to be that if the liberty of the claimant or his livelihood or his property is at stake, the court is likely to require the rules of natural justice or, perhaps better expressed, the rules of fair play, to be properly observed so that there is even-handedness between the parties.15 Otherwise and, subject to what is said in the last sentence of 14.4, the court is unlikely to intervene in contractual or domestic disputes between the club and a third party even if the rules of natural justice have not been observed.16

3.  Implied submission to the club’s jurisdiction 14.6 In the absence of an express contract between the club and the third party, the consensual submission will usually be inferred from the conduct of the parties.17 Let us take the example of some local amateur football clubs who join a particular league organised, say, by the county football association. No contract, written 14 [1964] AC 40 (where the Brighton Police Authority dismissed the Chief Constable without giving him the opportunity to defend his actions). 15 Lau Liat Meng [1968]  AC  391; Gaiman v National Association for Mental Health [1971] 1 Ch 317, at 336; R v Army Board of the Defence Council, ex p Anderson [1992] QB 169; R v Ministry of Defence, ex p Cunningham [1998] COD 134, DC. 16 Currie v Barton (1988) Times, 12 February, [1988] 2 WLUK 112, CA (where a professional tennis player walked out of a county amateur competition because he objected to his ranking; the county tennis association thereupon banned the player from the amateur county team without first hearing him; the court held that the rules of natural justice did not apply because the ban did not affect his earning ability). 17 Modahl v British Athletic Federation [2001] EWCA Civ 1447.

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Implied submission to the club’s jurisdiction 14.7 or oral, exists between the association and the individual players, who would be the third parties. The players will know: (a) that their games are played according to certain rules; (b) that serious misconduct on the field is neither sporting nor acceptable behaviour amongst their fellow players; and (c) that breach of the rules or misconduct will or may result in some sanction being imposed on them. Assume the league rules of the county association make provision for disciplining a player found guilty of misconduct, but these rules, although generally available, have not been seen or read by any of the players taking part in a particular game. In the course of this game a player deliberately assaults another player on the field causing him injury. The association now summons the player to a disciplinary hearing. Can the accused player assert that the association has no power to discipline him? The answer lies in the ability of the association to prove the necessary implied submission to its jurisdiction. In the ordinary course of events we consider that the association could reasonably draw the inference that, with his knowledge as indicated above, the accused player by his participation in the league’s activities will have voluntarily submitted to its jurisdiction. Such implication is unlikely to be overturned by the court. 14.7 In the case of Tod v Swim Wales18 the claimant was a volunteer polo coach at the Central Newport Swimming and Water Polo Club. The club was a member of the defendant Swim Wales, which was the national governing body for aquatic sport in Wales. In 2015 it came to light that the claimant had been court-martialled as an Army officer in 1993 for bullying young recruits, which also involved a sexual element. The club reported this to Swim Wales who investigated the matter and recommended his suspension from all Swim Wales activity until 2019 and his holding no position of trust with children until 2026. The claimant was aggrieved at the alleged unfairness of the disciplinary proceedings and the sanction, and sued Swim Wales on an implied contract. Mr Justice Choudhury held there was no intention to create legal relations between the claimant and Swim Wales and thus no need to imply a contract between them, and so the claimant lost the action. The judge relied on the principles set out in the judgment of Lord Justice Mance in Modahl v British Athletic Federation Ltd:19 Where there is an express agreement on essentials of sufficient certainty to be enforceable, an intention to create legal relations may commonly be assumed… It is otherwise when the case is that a contract should be implied from the parties’ conduct… It is then for the party asserting a contract to show the necessity for implying it’. Earlier, in the case of Blackpool and Fylde Aero Club v Blackpool Borough Council20 Lord Justice Bingham at 1202 stated, ‘Having examined what the parties said and did, the court must be able to conclude with confidence that the parties intended to create legal relations and that the agreement was to the effect contended for’. On the other hand, it should be noted in Tod v Swim Wales that, had there been an implied contract, Swim Wales would have been obliged in good faith: (a) to appoint a suitable independent person to conduct the investigation; and (b) to consider any report or recommendation: see the judgment at [124]. 18 [2018] EWHC 665 (QB). And see 5.69 (duty of care towards children). 19 [2001] EWCA Civ 1447 at [202]. This principle was approved by the Court of Appeal in Heis v MF Global UK Services Ltd (in administration) [2016] EWCA Civ 569, at [32] (Vos LJ). 20 [1990] 1 WLR 1195, CA.

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14.8  Third Party Challenges to Club’s Decisions

4.  Judicial review 14.8 We are now dealing with the third category, that is, the third party has not consented to the club’s jurisdiction because no contract, whether express or implied, exists to this effect between the club and the third party. Judicial review is the means by which the courts control administrative action by public bodies. Broadly speaking, it enables an individual to challenge or to prevent an abuse of power. It is a supervisory jurisdiction which reviews administrative action rather than being an appellate jurisdiction.21 There are two essential elements which comprise a public body: (1)

it must have a ‘public element’ (which may take many different forms);22 and

(2) it excludes those bodies whose sole source of power is by consensual submission to their jurisdiction.23 14.9 The courts will check that the claimant has sufficient standing or interest in making his claim.24 Judicial review may occasionally be an appropriate remedy for the claimant to adopt in a private law action even though there was a public law issue to be determined.25 Historically the courts have always been reluctant to interfere with domestic decisions made by clubs,26 but this reluctance is on the wane.27 Where, however, the claim falls into both public law and private law realms the claimant will have to justify his application for judicial review.28 It is to be remembered that judicial review should be considered the remedy of last resort.29 14.10 Livelihood claims Judicial review will more readily be entertained by the court in respect of livelihood claims made by third parties. Restraint of trade and its corollary, the right to work,30 have been the subject of much litigation. Suffice it to say that the courts will always look askance at club rules which restrict the manner or the area in which a non-member may work. Prima facie such a restriction is void on grounds of public policy and a rule which is unreasonable

21 Smith v Nairn Golf Club [2007]  SLT  909, at 910 (petition for judicial review against committee’s decision to suspend member for cheating in a match play competition). 22 R  (on the application of Beer (t/a Hammer Trout Farm)) v Hampshire Farmers Markets Ltd [2003] EWCA Civ 1056. 23 R v Panel on Take-overs and Mergers, ex p Datafin plc [1987] QB 815, at 838 (Donaldson MR). 24 R  (on the application of Holmcroft Properties Ltd) v KPMG LLP  [2016]  EWHC  323 (Admin) (where the Divisional Court stated at [38], ‘we consider that KPMG’s duties [to Barclays Bank] do not have sufficient public law flavour to render it amenable to judicial review’). 25 Andreou v Institute of Chartered Accountants in England and Wales [1998] 1 All ER 14, but see Gifford v Governor of HMP Bure and Another [2014] EWHC 911 (Admin) (Coulson J). 26 See 5.27. 27 See, eg  Simon Brown J’s comment in R  v Jockey Club, ex  p  RAM  Racecourses Ltd [1993] 2 All ER 225, at 247. 28 Senior Courts Act  1981, s  31(3). Representative groups may have sufficient standing to warrant an application for judicial review: R v Secretary of State for Social Services, ex p Child Poverty Action Group [1990] 2 QB 540. 29 R v Law Society, ex p Kingsley [1995] Lexis Citation 3122. 30 There is no right to work as such under the European Convention on Human Rights, but its provisions do protect workplace activities and the European Court has emphasised the right to earn a livelihood: see articles  4, 6, 8, 9, 10 and 11 of the Convention and see Starmer and Kilroy, European Human Rights Law (2012) at 28.1.

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Judicial review 14.10 or goes beyond what is necessary to protect the legitimate interests of the club will be struck down.31 (1) In Breen v Amalgamated Engineering Union32 Lord Denning MR, at 190, laid down the modern approach to this issue.33 Having referred to the need for statutory bodies to act fairly, he continued: ‘Does all this apply to a domestic body? I think it does, at any rate when it is a body set up by one of the powerful associations which we see nowadays. Instances are readily to be found in the books, notably the Stock Exchange, the Jockey Club, the Football Association and innumerable trade unions. All these delegate power to committees. These committees are domestic bodies which control the destiny of thousands. They have quite as much power as the statutory bodies of which I have been speaking. They can make or mar a man by their decisions. Not only by expelling him from membership, but also by refusing to admit him as a member: or, it may be, by a refusal to [give him a] licence or to give their approval. Often their rules are framed so as to give them a discretion. They claim that it is an “unfettered discretion” with which the courts have no right to interfere. They go too far.’ (2) In Nagle v Fielden34 (the woman trainer who was refused a trainer’s licence by the Jockey Club (see 14.2(3)) Lord Denning MR stated, at 646: ‘When an association, who have the governance of a trade, take it upon themselves to license persons to take part in it, then it is at least arguable that they are not at liberty to withdraw a man’s licence – and thus put him out of business – without hearing him. Nor can they refuse a man a licence – and thus prevent him from carrying on his business – in their uncontrolled discretion. If they reject him arbitrarily or capriciously, there is ground for thinking that the court can intervene.’35 (3) In Greig v Insole36 the International Cricket Conference and the Test and County Cricket Board, both unincorporated associations, proposed new rules which would have disqualified professional cricketers from playing international test cricket indefinitely if they played in matches organised by the World Series Cricket, a rival organisation set up by Kerry Packer. The player-plaintiff obtained a declaration that these rules were ultra vires the Conference’s and the Board’s powers and were void as being in unreasonable restraint of trade. (4) In Newport Association Football Club v Football Association of Wales37 the defendant association passed a resolution banning Welsh clubs from playing in a league organised by the English Football Association. Certain clubs wished to continue playing in that league. The defendant then prohibited these clubs from playing home matches on their ground in Wales, causing

31 Nordenfelt v Maxim Nordenfelt Guns and Ammunition  Co.  Ltd [1894]  AC  535; compare Eastham v Newcastle United Football Club Ltd [1964] Ch 413, at 437. 32 [1971] 2 QB 175. 33 See Eastham v Newcastle United Football Club Ltd [1964] Ch 413. 34 [1966] 2 QB 633. 35 See also Enderby Town Football Club v Football Association [1971] Ch  591,  CA, at 606; Modahl v British Athletic Federation Ltd [2001] EWCA Civ 1447 at [36] (Latham LJ). 36 [1978] 1 WLR 302. 37 [1995] 2 All ER 87.

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14.11  Third Party Challenges to Club’s Decisions them a loss of revenue. The clubs obtained a declaration that the sanction imposed was an unreasonable restraint of trade and obtained an interlocutory injunction allowing them to play home games in Wales. 14.11 Grounds of judicial review The grounds for holding the reviewed decision as invalid are normally (but not exclusively) grouped under the tripartite heading of illegality, irrationality and procedural impropriety:38 (1)

illegality: this includes errors of law and breach of convention rights under the Human Rights Act 1998;

(2)

irrationality: this includes Wednesbury unreasonableness, that is say, the decision is so unreasonable that no reasonable person could have come to it;39

(3)

procedural impropriety: this includes bias on the part of the decision maker40 and breach of the rules of natural justice (see 14.5).

14.12 Pre-action Protocol The Pre-action Protocol for Judicial Review sets out a code of good practice and contains the steps which the parties should generally follow when making a claim for judicial review. In particular, the protocol requires that before making a claim the claimant should send a letter to the defendant, the purpose being to identify the issues in dispute and to establish whether litigation can be avoided. The court will ask the parties what steps they have taken to resolve the dispute, including why a complaints procedure or some other form of alternative dispute resolution has not been used.41 14.13 Time limits The claim form must be filed with the court promptly and in any event not later than three months after the grounds to make the claim first arose.42 A  claim form filed after the time limit must be accompanied by an application to extend the time limit.43 The court will not extend the time limit without good reason,44 such as sensible and reasonable behaviour by the claimant which has caused no prejudice to the defendant45 or exhaustion of all alternative remedies by the claimant prior to commencing proceedings for judicial review.46

38 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, at [414] (Lord Roskill). 39 Associated Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, CA. 40 R v Gough [1993] AC 646. 41 R (Cowl) v Plymouth City Council [2001] EWCA Civ 1935; Practice Statement (Administrative Court: Administration of Justice) [2002] 1 WLR 810. 42 CPR 54.5(1). 43 CPR PD 54A, para 5.6. The power to extend the time limit is contained in CPR 3.1(2)(a). 44 R v Warwickshire County Council, ex p Collymore [1995] ELR 217. 45 R  v Commissioner for Local Administration, ex  p  Croydon London Borough Council [1989] 1 All ER 1033. 46 R v Rochdale Metropolitan Borough Council, ex p Cromer Ring Mill Ltd [1982] 3 All ER 761.

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Discrimination claims affecting third party livelihood 14.15

5.  Remedies available 14.14 The private law remedies are declaration, injunction and damages.47 The public law remedies are quashing orders, prohibitory orders and mandatory orders,48 although in appropriate cases the public law remedies may encompass the private law remedies.49 Private law rights are enforced in all the courts by way of the claim form procedure (see Chapter 19) whereas public law rights are enforced in the High Court of Justice by way of judicial review.

6.  Discrimination claims affecting third party livelihood 14.15 A separate form of challenge lies in discrimination cases, now underpinned by the Equality Act  2010 (as to which, see generally 4.19). Clubs which are qualification bodies must not discriminate against or victimise a third party where that person needs a qualification or authorisation to practise or engage in a particular trade or profession.50 To be a ‘qualification body’, however, the club must have the power to confer authorisations, qualifications, recognitions, registrations, enrolments, approvals or certificates51 and so it is not enough, for example, for a club or association which is simply providing educational services to be held liable for alleged discrimination52. Under this legislation Mrs Nagle today would have a statutory remedy against the British Horseracing Authority were it to refuse her a trainer’s licence on the ground that she was a woman.53 In British Judo Association v Petty54 the association refused to allow a woman referee to act as a referee in men’s international competitions and this refusal was held to amount to unlawful sex discrimination under earlier legislation.55

47 Roy v Kensington and Chelsea and Westminster Family Practitioner Committee [1992] 1 AC 624 (declaration); R v Secretary of State for Transport, ex p Factortame Ltd (No 2) [1991] 1 AC 603 (injunction); R v Secretary of State for Transport, ex p Factortame Ltd (No 5) [2000] 1 AC 524 (damages). 48 The Civil Procedure (Modification of the Supreme Courts Act 1981) Order 2004, SI  2004/1033, article  3, which renamed the former prerogative writs of certiorari, prohibition and mandamus. 49 See Senior Courts Act 1981, s 31(2) and (4). 50 Equality Act 2010, ss 53 and 54. 51 Ibid, s 54(3); 52 Kulkarni v NHS Education Scotland [2013] Equality LR 34, EAT (Smith J) (where the claimant was a consultant orthopaedic surgeon who unsuccessfully complained to the Employment Tribunal that the NHS respondent had failed for five years, on allegedly racially motivated grounds, to provide him with a trainee, whereas its role was to provide educational services to the medical profession). 53 See 14.2(3). 54 [1981] ICR 660, EAT. 55 Sex Discrimination Act 1975, s 13 (repealed and replaced by the Equality Act 2010). This case is still good law.

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Chapter 15

Landlord and Tenant Relationships Involving the Club

1. Introduction 15.1 Members’ clubs are sometimes fortunate to own a valuable freehold property; commonly their clubhouse and perhaps some surrounding land. Some of those clubs may have the opportunity or the need to raise money by letting some part of that property at a rent to a third party, who wishes to occupy for business or residential purposes. Some others of those clubs may want to house employees whose accommodation goes with the job. On the other hand, there are clubs who rent their premises from a freeholder or from a landlord who himself has a superior landlord. Those clubs, too, like those who own their own freehold, may wish to allow others into occupation. All of these clubs need to know the difference between a tenancy (or lease1), a licence and a service occupancy agreement, and – where there is a choice – which of these arrangements will best suit the club. Furthermore, the club will need to know the covenants (or obligations) by which it is bound or benefited in entering into those arrangements, which may arise expressly or implicitly, and what they mean. Over the centuries the judgemade common law has evolved many rules regulating the landlord and tenant relationship but Parliament throughout the twentieth century brought in more and more legislation modifying those common law rules, as well as laying down statutory codes regulating residential tenancies (both in the public and the private sector) and business tenancies.2 Because of its activities, a club holding its premises under a tenancy (or letting or sub-letting to a business occupant) needs to know about the statutory regulation of business tenancies. Any club letting premises to a residential occupier needs to know about the statutory regulation of residential tenancies. A  fundamental aim of statutory regulation of both business and residential tenancies is the restriction of the landlord’s right to terminate a tenancy or, looked at from the tenant’s point of view, the aim of providing what is called ‘security of tenure’. It has been remarked in relation to residential tenancies that, ‘There is no doubt that the present situation is unnecessarily complicated and is

1

2

The words ‘tenancy’ and ‘lease’ are essentially interchangeable. Some lawyers reserve ‘tenancy’ for a shorter-term arrangement and ‘lease’ for a longer-term one. Some do not. Most are entirely inconsistent. In this text the words ‘tenancy’, ‘landlord’ and ‘tenant’ are preferred over their equivalents of ‘lease’, ‘lessor’ and ‘lessee’. However the word ‘leasehold’ (which has no equivalent) and the verb ‘to let’ (which is more common – and more user-friendly – than ‘to lease’ or ‘to grant a tenancy of’) also appear. See footnote 73 for an example of convoluted legislation.

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15.2  Landlord and Tenant Relationships Involving the Club overdue for reform’.3 If in doubt as to its legal position, it is strongly recommended that a club seek legal advice when taking or granting a tenancy of club property, or buying or selling let property, in order to safeguard its assets and to understand fully its legal position. 15.2 We will first deal with tenancies generally, then with business tenancies followed by residential tenancies, and finally we will deal with licences.

2. Tenancies 15.3 There are only two legal estates in land: the freehold and the leasehold. In legal language the former is called ‘a fee simple absolute in possession’ and is the greater estate and the latter is called ‘a term of years absolute’ and is the lesser estate.4 The freehold estate gives absolute ownership of land5 whereas the leasehold estate creates an interest in land for a fixed period of time. A tenancy will either be a ‘fixed term tenancy’ or a ‘periodic tenancy’. In the former the interest in land determines automatically when the fixed term has expired,6 whereas in the latter the interest in land continuously renews because the period reiterates until either the landlord or the tenant puts an end to it by a notice to quit.7 If a club remains in possession of land for more than 12 years after termination of a tenancy without paying rent it is possible, at least in respect of unregistered land, that it may acquire title by adverse possession.8 There is no doubt that the tenancy plays an important part in both the social and economic affairs of the country; hence the frequency with which the tenancy is encountered in the business, residential and agricultural sectors. 15.4 With certain exceptions a tenancy must be created in a formal document,9 the most important exception being a tenancy for a term not exceeding three years.10 It is the essence of a tenancy that the tenant should be given exclusive possession of the property.11 This differentiates it from a licence, although the dividing line between the two is sometimes a fine one.12 A tenancy creates not only an estate in land (ie is binding against all the world) but also imposes contractual

3 4

Blackstone’s Civil Practice 2008, Chapter 86 at 86.1. A remark still applicable in 2020. Law of Property Act 1925, s  1. The briefest mention should be made of Part 1 of the Commonhold and Leasehold Reform Act 2002 (which came into force September 2004). Commonhold provides a vehicle for freehold ownership of buildings or land where there are common parts held by a commonhold association (ie  the entity which owns the freehold of the common land). Commonhold has not proved popular: by 2018 fewer than 20 schemes had been registered at Land Registry (per Law Commission’s consultation paper ‘Reinvigorating commonhold: the alternative to leasehold ownership’). 5 As a matter of strict law, even a freeholder holds from the Crown. But this only arises for consideration when a real person dies intestate with no relatives or when a company ceases to exist. 6 Save where a statutory code provides for its continuation or it is terminated early (whether consensually (eg by surrender) or unilaterally (eg by the exercise of a break clause or by forfeiture)). 7 Javid v Aqil [1991] 1 WLR 1007, CA, at 1009. 8 Mitchell v Watkinson [2014] EWCA Civ 1472. 9 Crago v Julian [1992] 1 WLR 372, CA, at 376. 10 Law of Property Act 1925, ss 52(2)(d), 54(2). 11 Street v Mountford [1985] AC 809. 12 See further 15.46.

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Covenants in tenancies 15.7 covenants between the landlord and the tenant,13 for example, a tenant’s covenant to pay rent or a landlord’s covenant to carry out structural repairs. Both the landlord and the tenant, unless prohibited by the terms of the tenancy, are able to sell their respective interests in it.14 15.5 As to formalities, an unincorporated members’ club cannot hold property in its own name.15 This means that trustees must be appointed to hold property, both freehold and leasehold, belonging to the club. A joint tenancy granted to a company and an unincorporated members’ club may take effect as a grant to the company to hold on trust for the company and the club.16 A literary and scientific institution and a working men’s club must hold all its property in trustees’ names.17 A  community club and a company club can hold property in their own names because they are legal persons, but it is common for it to be held in the name of specially appointed trustees.

3.  Covenants in tenancies 15.6 The covenants in a tenancy are the contractual promises made by the landlord to the tenant and vice versa.18 Generally speaking, the parties are at liberty to agree whatever terms they see fit. They are binding between the original parties and until 1995 were generally enforceable by and against both original covenantors and their successors in title. Nowadays, however, the Landlord and Tenant (Covenants) Act  1995 provides for limits on the liability of a landlord or tenant who assigns his interest in a tenancy created on or after 1 January 1996. Previously, original parties to the tenancy may have retained contractual liabilities long after they ceased to have any connection with the land, even being liable to parties with whom they did not originally contract.19 15.7 Implied covenants If the parties do not expressly make any provision, the following covenants will be automatically implied as a matter of common law or pursuant to statute: (1)

on the part of the landlord: a covenant for quiet enjoyment;20 a covenant not to derogate from grant;21 a covenant that a furnished house is fit for human habitation at the time of the grant of the tenancy;22 a covenant to take reasonable steps to keep in repair such facilities as are essential for the enjoyment of the demised premises and which are retained by the landlord

13 City of London Corporation v Fell [1994] 1 AC 458. 14 See 15.6 as to the effect of assignment on the original parties’ contractual liabilities. 15 See 5.19. 16 Panton v Brophy [2019] EWHC 1534 (Ch). (The company was Hounslow Hockey Club Ltd and the club was The Thames Tradesmen’s Rowing Club, re their tenancy of the Chiswick Boathouse.) 17 Literary and Scientific Institutions Act 1854, s 19; Friendly Societies Act 1974, s 54. 18 Strictly speaking, only promises under seal (ie  in a deed) are covenants but the word ‘covenant’ is commonly used in many tenancies. 19 See Spencer’s Case (1582) 5 Co Rep 16a; Law of Property Act 1925, ss 141 and 142. 20 Budd Scott v Daniell [1902] 2 KB 351. Note: The covenant for quiet enjoyment has nothing to do with noise but is a covenant that the tenant may peaceably hold the premises without substantial interference by the landlord or anyone claiming under him. 21 Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200, CA. 22 Smith v Marrable (1843) 11 M & W 5.

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15.8  Landlord and Tenant Relationships Involving the Club as common parts of a building23 or estate;24 a covenant that a house let at a very low rent is fit for human habitation at the time it is let and will be so kept by the landlord,25 and in respect of the tenancy of a dwelling-house for a term of less than seven years a covenant to keep in repair its structure and exterior and to keep in repair and proper working order installations therein for the supply of water, gas, electricity and sanitation and for space heating and heating water;26 (2)

on the part of the tenant: a covenant to pay rent;27 a covenant to pay rates and taxes not payable by the landlord28 (eg rates or council tax); a covenant not to commit waste;29 where a landlord is obliged to repair the premises, a covenant to allow him to enter and view the state of repair.30

15.8 Usual covenants The parties may agree that a tenancy shall be entered into on ‘the usual covenants’. Such a term will be implied even if the parties do not expressly agree it.31 What is a ‘usual’ covenant may depend on local custom or normal commercial usage and when the tenancy was granted. However, the following covenants will generally be considered ‘usual’:32 (1)

on the part of the landlord: a covenant for quiet enjoyment;

(2)

on the part of the tenant: a covenant to pay rent; a covenant to pay tenant’s rates and taxes; a covenant to keep the premises in repair and deliver them up in repair at the end of the term; a covenant to permit the landlord to enter and view the state of repair (if the landlord has undertaken any obligation to repair); a condition of re-entry for non-payment of rent (but not for breach of any other covenant).

15.9 Common covenants The following are commonly inserted into tenancies, with the concurrence of both parties: a tenant’s covenant not to assign; a tenant’s covenant not to carry on certain trades or activities; and a proviso for forfeiture for breaches by the tenant of any covenant, whether for payment of rent or otherwise. It should be noted that a tenant’s covenant not to assign, sub-let or part with possession (absent which, the tenant may freely do so) may be an absolute undertaking or a qualified one. It is qualified where the prohibition is not to do these things without the landlord’s consent. In this event, the covenant is subject to the proviso that the consent will not be unreasonably withheld33 and given within a reasonable time.34 In tenancies granted since 1995 the parties

23 24 25 26 27 28 29 30 31 32 33 34

Liverpool City Council v Irwin [1977] AC 239. King v South Northamptonshire DC (1992) 64 P&CR 35, CA. Housing Act 1985, s 8(1). Landlord and Tenant Act 1985, s 11. Section 12 prevents contracting out of this provision. Dean and Chapter of Rochester v Pierce (1808) 1 Camp 466. See eg Local Government Finance Act 1988, ss 6 and 43. Statute of Marlbridge 1267. Saner v Bilton (1878) 7 Ch D  815; Mint v Good [1951] 1  KB  517. A  landlord’s right to enter may also arise pursuant to statute, eg Landlord and Tenant Act 1927, s 10 (business premises) and Landlord and Tenant Act 1986, s 11(6) (residential premises). Propert v Parker (1832) 3 My & K 280. Hampshire v Wickens (1878) 7 Ch D 555. Landlord and Tenant Act 1927, s 19(1). And see Design Progression Ltd v Thurloe Properties Ltd [2004] EWHC 324 (Ch) (exemplary damages awarded to tenant in respect of landlord’s breach of its statutory duty in relation to consent). Landlord and Tenant Act 1988, s 1.

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Covenants in tenancies 15.12 may agree in advance specific circumstances in which the landlord may withhold consent or conditions subject to which consent may be given.35 15.10 In the case of Ranken v Hunt36 the Hoddlesden Working Men’s Club’s tenancy contained a covenant that its premises should not be used for ‘sale of wine malt liquor or spirituous liquors’. The club rules provided for the purchase of such liquors and its distribution at fixed prices amongst the members, the profits being applied to the general purposes of the club. The court held that this distribution to the members was not a sale within the meaning of the covenant.37 15.11 Forfeiture Many tenancies contain an express right of (peaceable) reentry or forfeiture by the landlord in the event of specified events, such as the tenant’s breach of covenant (eg the covenant to repair) or the insolvency of the tenant. Forfeiture should be seen not as a method of termination of the tenancy but as a remedy or sanction against a defaulting tenant. Because it is a formidable remedy38 which can often result in termination of the tenancy, it has long been regulated by Parliament and the courts as follows: (1) the right must arise under the terms of the tenancy (so either expressly, or – in relation to re-entry for non-payment of rent only – as one of the ‘usual’ covenants);39 (2)

the landlord must comply with strict procedural requirements;

(3)

it is subject to strict rules of waiver;

(4)

the tenant has extensive rights to apply to the court for relief from forfeiture.

15.12 The right to forfeit (save for non-payment of rent40) is not enforceable by action or otherwise unless and until the landlord serves on the tenant a notice:41 (1)

specifying the event or breach complained of;

(2)

if capable of remedy, requiring the tenant to remedy the breach;

(3)

requiring the tenant to pay compensation for the breach.

The breach can be waived where a landlord, knowing of the breach, unequivocally recognises the continuance of the tenancy (such as by demanding rent falling due after the breach42). Unless there are exceptional circumstances, relief from forfeiture in the case of failure to pay rent will almost invariably be granted if the tenant pays the arrears of rent plus costs before judgment is given.43 Indeed, where the landlord is proceeding by action then if the tenant pays the arrears and costs at any time prior to a High Court trial44 or not less than five clear days before

35 36 37 38 39 40 41 42 43 44

Landlord and Tenant (Covenants) Act 1995, s 19. (1894) 38 Sol Jo 290, DC. See further 9.3. The Law Commission has said ‘the law of forfeiture is in need of urgent reform’ and has recommended a statutory scheme for the termination of tenancies following breach of covenant by the tenant (Law Com No 303, 2006). Hodgkinson v Crowe (1875) 10 Ch App 662. Law of Property Act 1925, s 146(11). Law of Property Act 1925, s 146. Segal Securities Ltd v Thoseby [1963] 1 QB 887. Blackstone’s Civil Practice 2008, at 85.31. Common Law Procedure Act 1852, s 212.

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15.13  Landlord and Tenant Relationships Involving the Club the county court hearing,45 then the proceedings will cease and the tenancy will continue. In non-rent cases, the tenant has the right to apply to the court for relief where it may grant or refuse relief on such terms as it thinks fit,46 such as making an order for payment of compensation or granting an injunction to restrain future breaches. In deciding whether to grant relief, the court will take into account all the circumstances of the case, including the nature of the breach; its seriousness; the conduct of the parties; the value of the property; and what losses will be suffered by the tenant if relief is not granted.

4.  Business tenancies 15.13 Introduction  Even if the club has no cause to think about letting any part of its premises or property to a business user, there is one good reason why members’ clubs need to know about business tenancies and that is the protection given by Part II of the Landlord and Tenant Act 195447 (in this section 4: ‘the Act’) which by section 23(1) applies to the occupation by a tenant of premises for ‘the purposes of business’.48 Section 23(2) states: ‘In [Part II] the expression ‘business’ includes a trade, profession or employment and includes any activity carried on by a body or persons, whether corporate or unincorporate.’ Thus in the leading case of Addiscombe Garden Estates Ltd v Crabbe,49 where the trustees of the Shirley Park Lawn Tennis Club, a community club, took a ‘licence’ of some tennis courts and a clubhouse, the Court of Appeal held: (a) that although described as a licence the document should be construed as a tenancy; and (b) that the club was carrying on a relevant activity in the shape of a lawn tennis club and thus came within the Act.50 It is therefore surmised that virtually all those members’ clubs which have a tenancy of their premises will have protection under Part II of the Act.51 15.14 Occupation of premises The club must occupy the premises in question by virtue of a tenancy, which can be either a fixed-term tenancy (unless for less than six months52) or a periodic one. A sub-tenancy is sufficient but not a tenancy at will,53 nor a licence.54 The expression ‘premises’ is not defined in the Act but has

45 County Courts Act 1984, s 138. 46 Law of Property Act 1925, s 146(2). 47 As substantially amended by the Regulatory Reform (Business Tenancies) (England & Wales) Order 2003, SI 2003/3096 (‘the Reform Order 2003’). 48 Landlord and Tenant Act 1954, s 23(1). 49 [1958] 1 QB 513, CA. 50 There are limits, however: see Hillil Property & Investment Co Ltd v Naraine Pharmacy Ltd (1980) 39 P & CR 67 (occupying premises to dump waste and rubbish not a protected activity); compare Groveside Properties Ltd v Westminster Medical School (1983) 267 EG 593 (where a tenancy of a flat taken by a medical school to provide, as part of its business activities, residential accommodation in a collegiate spirit was held to be protected). 51 See Coles v Samuel Smith Old Brewery (Tadcaster) [2007] EWCA Civ 1461, at [2] (where the tenancy of a working men’s club was recognised as a business tenancy). 52 Landlord and Tenant Act 1954, s 43(3). 53 Wheeler v Mercer [1957] AC 416; Manfield & Sons Ltd v Botchin [1970] 2 QB 612. 54 Agreed by the parties in National Car Parks Ltd v Trinity Development Co (Banbury) Ltd [2001] EWCA Civ 1686.

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Business tenancies 15.16 been construed broadly: it includes a building or part of a building or simply land with no building on it. Thus in Bracey v Read55 a tenancy of land without buildings, namely, some gallops on the Lambourn Downs used for training racehorses, was held to be a protected business tenancy. Where a tenancy of club property is held by trustees on trust for the members, the carrying on of the business by all or any of the beneficiaries (the members) is treated as equivalent to occupation by or the carrying on of business by the tenant.56 15.15 Security of tenure The security of tenure is achieved by the automatic continuation of the tenancy under section 24 of the Act and the tenant’s right to apply to the court for a new tenancy of up to 15 years’ duration.57 If the tenant gives up possession at or before the expiry of a fixed term then the tenant has no security.58 Otherwise, the tenancy will not come to an end unless it is terminated in one of the statutory methods set out in the Act59 or by the tenant’s notice to quit or his surrender of the tenancy or by the landlord’s forfeiture.60 This means that, without more, the business tenancy will continue after the determination of a fixed-term tenancy (whether by effluxion of time or by the mere exercise of a landlord’s break clause) and after the service of a landlord’s notice to quit in respect of a periodic tenancy. The statutory methods are: (1)

by the landlord giving notice to terminate the tenancy under section 25;

(2)

by the tenant making an application for a new tenancy under section 26;

(3)

by the tenant giving notice to terminate the tenancy under section 27.

15.16 Section 25 notice The ‘competent’ landlord61 must serve the notice in the prescribed form.62 It must be served not more than 12 months nor less than six months before the date of termination specified in the notice which date may not be earlier than that on which the tenancy would have expired by effluxion of term (if a fixed term) or could have been brought to an end by notice to quit (if periodic).63 The prescribed notice must: (1)

specify the date at which the tenancy is to come to an end (the ‘termination date’);64

(2)

inform the tenant that if he wishes to ask the court for a new tenancy he must do so before the termination date unless, before that date, an agreement in writing to extend time is entered into;65

55 [1963] Ch 88. 56 Landlord and Tenant Act 1954, s 41(1). 57 Ibid, s 33. Previously the maximum term was 14 years. Fifteen makes quinquennial rent reviews easier. 58 Esselte AB v Pearl Assurance plc [1997] 1 WLR 891. 59 Landlord and Tenant Act 1954, s 23(1). 60 Ibid, s 23(2). 61 Negotiation for a new tenancy will not be meaningful if, say, the immediate landlord is himself a tenant whose term is only slightly longer than the occupying tenant’s interest, so the 1954 Act provides a mechanism for identifying the one person with whom the occupying tenant should deal and who is called ‘the competent landlord’ (s 44(1)). 62 See Forms 1 and 2 in the Landlord and Tenant Act 1954, Part II (Notices) Regulations 2004, SI 2004/1005. 63 Landlord and Tenant Act 1954, s 25(2). 64 Ibid, s 25(1). 65 Prior to 1 June 2004 a section 25 notice also required the tenant to serve a counter notice within two months stating whether the tenant did or did not intend to give up possession in accordance with the section 25 notice.

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15.17  Landlord and Tenant Relationships Involving the Club (3)

state whether the landlord is or is not opposed to the grant of a new tenancy;66

(4) in a case where the landlord opposes the grant of a new tenancy, state the statutory grounds relied upon;67 (5) in a case where the landlord does not oppose the grant of a new tenancy, state the terms proposed for the new tenancy.68 15.17 If there is a break clause in the tenancy, the club may find that the landlord will serve two notices, a section 25 notice and a contractual break clause notice, each terminating the tenancy. It might be asked why one combined notice might not be sufficient. The answer is this: if the combined notice complies with the Act but does not fulfil the provisions of the contractual break clause it will be of no effect and the tenancy will continue on a contractual basis, and the landlord will have to wait until the next break clause (if there is one) or until the tenancy expires; on the other hand, if the combined notice fulfils the provisions of the contractual break clause but does not comply with the Act, the contractual term will be brought to an end but will be automatically continued under section 24 of the Act until the landlord serves a valid section 25 notice. 15.18 If a landlord serves a section  25 notice but no application is made to the court for a new tenancy within the required time, namely, (in the absence of written agreement(s) to extend69) by the termination date referred to in 15.16(1), the tenancy will come to an end on that date. A landlord may not serve a section 25 notice if the tenant has already served notice under section 26 or 27 (see 15.22 and 15.23) or served notice to quit.70 15.19 Grounds of opposition  Section  30(1) of the Act of 1954 provides seven grounds of opposition upon which the landlord can rely in opposing the application for a new tenancy: (1)

ground (a): the tenant’s failure to comply with repairing obligations;

(2)

ground (b): the tenant’s persistent delay in paying rent;

(3)

ground (c): the tenant’s substantial breach of other obligations or his misuse or mismanagement of the premises;

(4)

ground (d): suitable alternative accommodation being available;

(5)

ground (e): the tenancy having been created by a subletting of part, the landlord having a reversionary interest in the whole, and the rental value of the whole being higher than the aggregate of that from the let property and the remainder (this rarely arises in practice);

(6)

ground (f): the landlord’s intention to demolish or reconstruct the premises (a common ground);

66 Landlord and Tenant Act 1954, s 25(6). 67 Ibid, s 25(7): see 15.19. 68 Ibid, s 25(8) as inserted by articles 2 and 4 of the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003, SI 2003/3096. This presumably means realistic proposals: see Mount Cook v Rosen [2003] 1 EGLR 75 (where ‘proposal’ under the Leasehold Reform Housing & Urban Development Act 1993 was held to mean a realistic proposal which could be justified by expert valuation evidence). 69 Landlord and Tenant Act 1954, ss 29B and 69(2). 70 Ibid, s 26(4).

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Business tenancies 15.21 (7)

ground (g): the landlord’s intention to occupy the premises himself either for business purposes or as his residence.

Under grounds (a), (b) and (c) the court has a discretion whether to grant or refuse a new tenancy if the ground is made out. There is no discretion if the landlord establishes his opposition under grounds (d), (e), (f) and (g): no new tenancy will be granted. Ground (g) is not available to the landlord unless the landlord has owned his interest in the property for at least five years prior to the termination of the tenancy.71 Under grounds (d), (e) and (f) the landlord may be able to satisfy the court that he can make good the ground of opposition at a date not later than one year after the date of termination specified in the section 25 notice and, if so, the court will make a declaration to this effect, and no new tenancy will be granted.72 In relation to grounds (e), (f) and (g) the tenant may be entitled in certain circumstances to compensation for quitting the premises.73 If a ground is not specified in a section 25 notice, the landlord will not subsequently be able to rely on that ground. In proceedings for a renewed tenancy, grounds of opposition are habitually tried as a preliminary issue. In respect of grounds (f) and (g) it is the intention of the landlord as at the hearing of that preliminary issue (and not as at the date of the notice) which is to be proved.74 15.20 Terms of the new tenancy If the tenant applies to the court for a new tenancy, its terms will be decided by the court if the parties cannot agree. They will include what property will be included the new tenancy,75 its duration,76 the rent77 and other terms.78 Between the service of a section 25 notice and the granting of a new tenancy there may be a considerable time interval and the existing rent will continue to be payable. If this rent was low the tenant had everything to gain by delay, so that since 1969 by section 24A of the 1954 Act79 the landlord has been able to apply to the court to determine an interim rent which is reasonable for the tenant to pay. On the other hand, if the existing rent is higher than rents currently being obtained it is the landlord who gains by delay. With effect from 1 June 2004 the tenant has been able to apply to the court for a reasonable interim rent to be determined.80 15.21 It should be noted that, with effect from 1 June 2004 the landlord as well as the tenant can apply for a new tenancy81 and, conversely, that the landlord can apply for an order from the court that the current tenancy be determined and that

71 Landlord and Tenant Act 1954, s 30(2). 72 Ibid, s 31(2). 73 Ibid, s  37, as substituted by Law of Property Act 1969, and then amended by (a) Local Government, Planning and Land Act 1980, (b) Local Government and Housing Act 1989, (c) Local Government Finance (Miscellaneous Amendments and Repeal) Order 1990, SI 1990/1285, (d) the Reform Order 2003 (see footnote 47) and (e) Transfer of Tribunal Functions (Lands Tribunal and Miscellaneous Amendments) Order 2009, SI 2009/1307. 74 Betty’s Cafés Ltd v Phillips Furnishing Stores Ltd [1959] AC 20. 75 Landlord and Tenant Act 1954, s 32(1). 76 Ibid, s 33. 77 Ibid, s 34(1). 78 Ibid, s  35, eg  including a break clause (Leslie and Godwin Investments Ltd v Prudential Assurance Co Ltd (1987) 283 EG 1565) or excluding an option to purchase (Kirkwood v Johnson (1979) 38 P&CR 392). 79 Added by the Law of Property Act 1969. 80 Landlord and Tenant Act 1954, s  24A(1), as substituted by the Reform Order 2003, articles 1 and 18. 81 Ibid, s 24(1).

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15.22  Landlord and Tenant Relationships Involving the Club no new tenancy be granted.82 This means that the landlord’s ground or grounds of opposition can be used as a springboard for an order for possession against the tenant. The landlord’s application may be made as soon as he has served his section 25 notice or as soon as the tenant has requested a new tenancy pursuant to a section 26 notice and the landlord has given a counter-notice under section 26(6).83 15.22 Section 26 notice Unless the landlord has already served a section 25 notice,84 a tenant may take the initiative and serve, either during the contractual term or while the tenancy is continued by statute, a notice under section 26 of the Act requesting a new tenancy. The effect of a section 26 notice is to terminate the tenant’s current tenancy immediately before the date specified in the request for the beginning of the new tenancy.85 The notice must be in the prescribed form86 and must be served on the competent landlord.87 Generally speaking, however, it may be unwise to serve a section 26 notice because, until it is known whether the landlord wishes to terminate the existing tenancy, it will not be in the interests of the tenant to request a new one; the existing tenancy will continue in any event under section 24 and very often will be on terms more favourable than those of a new tenancy, particularly at a time where rents are rising. If, on receiving a tenant’s section 26 notice, the landlord does not want to grant a new tenancy he must serve within two months a counter-notice to that effect, stating upon which of the statutory grounds he will oppose any application for a new tenancy.88 As with a section 25 notice, any grounds not specified in a counter-notice may not subsequently by raised by a landlord. If a tenant serves a section 26 notice then he must still make an application to court for a new tenancy and do so prior to the date specified in his section 26 notice.89 Such an application may not be made within two months of his section 26 notice, unless the landlord has already served a counter-notice.90 15.23 Section 27 notice The tenant may not wish to apply for a new tenancy, in which case he may serve a notice on the landlord under section 27 of the 1954 Act. This provision only applies to fixed-term tenancies. The tenant must give notice in writing to his immediate landlord not later than three months before the date on which the tenancy would come to an end by effluxion of time.91 Once the notice is given, section 24 will not apply and the tenancy will come to an end on its contractual date. If the contractual date has passed, so that the tenancy is being continued under section 24, the tenant can still give a section 27 notice: three months’ notice in writing must be given to his immediate landlord and the notice must expire on a quarter day.92 We add that a section 27 notice which is served

82 Landlord and Tenant Act 1954, s 29(2), as substituted by the Reform Order 2003, articles 2 and 5. 83 Ibid, s 29(2). 84 Ibid, s 26(4). 85 Ibid, s 26(5). 86 The prescribed form is Form 3 in the Landlord and Tenant Act 1954, Part II (Notices) Regulations 2004. 87 Landlord and Tenant Act 1954, s 26(5). 88 Ibid, s 26(6). There is no prescribed form. 89 Ibid, ss 24(1)(b) and 29A. 90 Ibid, s 29A(3). 91 Ibid, s 27(1). 92 Ibid, s 27(2).

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Residential tenancies 15.26 before the tenant has been in occupation for a month is of no effect.93 This is to prevent landlords granting tenancies on condition that a section 27 notice is served so as to circumvent the provisions for security of tenure. 15.24 Contracting out of the 1954 Act Originally any attempt by the landlord to contract out of the provisions of Part  II of the Landlord and Tenant Act 1954 was rendered void,94 but in 1969 the Act was amended to permit the court on the joint application of the parties to exclude the tenancy from the security of tenure provisions of the Act, or to approve a surrender.95 In the event of the former, the application had to precede the grant of the tenancy.96 Since 1  June 2004 it has no longer been necessary to apply to the court for authorisation. The current procedure for contracting out requires the landlord to give a notice in writing to the tenant, urging the tenant to obtain independent legal advice before accepting a tenancy with no security provisions, and the tenant has to sign a declaration that this warning has been given.97

5.  Residential tenancies 15.25 In the private sector there are two statutory codes, one under the Rent Act 1977 and the other under the Housing Act 1988 as amended by the Housing Act 1996 and supplemented by the Housing Act 2004, the main difference being the high level of security granted to the tenant under the former code and the much lower level of security which is possible under the latter code. 15.26 Rent Act 1977 This Act was the last in a series of Acts which commenced in 1915 in order to restrict rents in the face of a housing shortage in the First World War and which together are generally known as ‘the Rent Acts’. It will generally only apply to tenancies created before 15 January 1989 and so they are becoming increasingly scarce. In view of this, it is likely that a club will be concerned only with the residential situation under the Housing Acts 1988 to 2004 and in particular with the form of tenancy called the assured shorthold tenancy. We can therefore limit our discussion to saying that a tenant with security of tenure under the Rent Act 1977 is a regulated tenant. Initially, while his contractual tenancy (which may be a fixed term of many years or periodic from, say, week to week) is extant he is known as a ‘protected tenant’. Thereafter, once any contractual tenancy has been determined, he has what is frequently described as a personal status of irremovability98 and is known as a ‘statutory tenant’.99 In order to obtain possession of property occupied by a regulated tenant the contractual tenancy must first be terminated (eg  on the expiry of a fixed-term tenancy or by the service of a landlord’s notice to quit in relation to a periodic tenancy) so as to render the tenant a statutory tenant. Then the landlord must further obtain an order of the court. 93 94 95 96 97

Landlord and Tenant Act 1954, s 27(1). Ibid, s 38(1). By adding a new s 38(4): Law of Property Act 1969, s 15 and Sch 1 (now repealed). Essexcrest Ltd v Evenlex Ltd (1988) 55 P & CR 279. Landlord and Tenant Act 1954, s 38A, added by the Reform Order 2003, article 22(1). If the declaration is made less than 14 days before the tenancy commences, the declaration must be in the form of a statutory declaration made before another solicitor retained for the sole purpose of administering the oath: the Reform Order 2003, Sch 2. 98 A phrase first coined by Lush J in argument in Keeves v Dean [1924] 1 KB 685. 99 Rent Act 1977, s 2(1).

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15.27  Landlord and Tenant Relationships Involving the Club Save for certain limited cases, a court will only make an order for possession if the landlord persuades the court that it is reasonable to make an order100 and either: (1) suitable alternative accommodation is available for the tenant;101 or (2) one or more of the permitted statutory grounds for obtaining possession is made out. Regulated tenants (whether protected or statutory) are popularly referred to as ‘Rent Act tenants’ or ‘sitting tenants’. 15.27 Housing Act 1988 The Housing Act 1988 created an assured tenancy (generally referred to as an ‘assured tenancy’ or a ‘fully assured tenancy’) and a sub-species called an assured shorthold tenancy (generally referred to as an ‘AST’), the latter having much less security than the former. One of the specific reasons for enacting the Housing Act 1988 was to create a residential tenancy with limited security of tenure. It was thought that the prospect of landlords finding themselves lumbered with tenants who were very difficult to remove had led to a shortage of rental properties coming on to the market. Originally the only way of creating an AST was by serving a valid section 20 notice (which set out important information for the tenant) before the agreement was entered into. In the absence of a valid notice the tenancy defaulted to a fully assured tenancy. The procedure was frequently forgotten or incorrectly observed and many landlords found themselves with assured tenants who were hard to remove, contrary to the legislative purpose. Consequently, since 28 February 1997 the default tenancy has been the AST and it will usually not be a fully assured tenancy unless the landlord serves a notice in the prescribed form on the tenant either before or during the course of the tenancy to the effect that the tenancy is a fully assured tenancy.102 The difference between the two tenancies is considerable in practice. On the one hand, with a fully assured tenancy the landlord can only obtain possession by proving either: (1) that one or more of the mandatory grounds in Schedule 2 to the Housing Act 1988 is made out; or (2) that one or more of the discretionary grounds in that schedule is made out and that it is reasonable to make an order and, in either event, that a notice under section 8 specifying the relevant ground and the particulars thereof has been served on the tenant.103 On the other hand, with an AST the landlord can obtain possession simply by showing: (a) that the tenancy has come to an end; and (b) that the tenant has been given proper notice104 requiring possession. Hence the AST has become very popular with landlords.105 15.28 To qualify as an assured tenant (whether shorthold or not), the tenant must be an individual106 and he must occupy the dwelling as his only or principal

100 Rent Act 1977, s 98(1). 101 Ibid, s 98(1). 102 Housing Act 1988, s 19A and Sch 2A, para 1. 103 Examples of the grounds are given in 15.31. 104 Under Housing Act 1988, s 21. 105 In April 2019, however, the Government announced plans to repeal s 21 of the Housing Act 1988 so as to abolish ‘no-fault evictions’. But for whatever reason the Government has not proceeded with this repeal. Such a change would, if effected, give significantly increased security to residential tenants. In order to mitigate the risk that such an increase might lead to a reduction in available rental properties, at the same time the Government announced its intention to ‘strengthen the section 8 possession process’ so as to ensure that landlords would be able to regain possession should they wish to sell or move into the property themselves: see the Ministry of Housing, Communities and Local Government, Overcoming the Barriers to Longer Tenancies in the Private Rented Sector (April 2019). 106 Housing Act 1988, s 1(1)(a). If it is a joint tenancy, each tenant must be an individual but only one of them need satisfy the occupation test.

314

Residential tenancies 15.30 home.107 Because ASTs may be created informally, there is now an obligation108 on the landlord to provide a written statement of certain essential terms which have not been evidenced in writing, as follows:109 (1)

the date on which the tenancy began;

(2)

the amount of rent payable and the dates on which it is payable;

(3)

any term providing for the review of rent;

(4)

in the case of a fixed-term tenancy, the length of that term.

15.29 Terms of the tenancy By and large the parties are free to enter into an assured tenancy on whatever terms they agree.110 The tenancy itself may be for a fixed term, eg for six months or a year, or a periodic tenancy, eg from week to week or from month to month. In addition, there are statutorily implied terms that the tenant will give the landlord access to the dwelling-house to enable him to execute repairs which he is entitled to execute111 and that he will not without the consent of the landlord assign the tenancy or sub-let or part with possession of the whole or any part of the dwelling.112 Most importantly, section 11 of the Landlord and Tenant Act 1985 (which applies to tenancies of dwelling houses for a term of less than seven years113) imposes general repairing obligations on the landlord.114 It is not possible to contract out of these statutory provisions.115 15.30 Landlord’s general liability for defects A landlord is not an occupier and had no liability at common law for any defect in the property which he had let to anyone other than the tenant.116 Here again Parliament stepped in and passed the Defective Premises Act  1972 which provides a statutory remedy against the landlord in certain cases. Section  3 abolished the common law rule by virtue of which vendors and landlords of land were held immune from liability for negligence in building or other work carried out on the land before its sale or letting. Section 4 now imposes a duty of care on a landlord for relevant defects117 in the state of the premises which he has let and where he has an obligation or right to remedy such defects. The duty is to take reasonable care to ensure that all persons who might reasonably be expected to be affected by defects do not suffer loss or damage.118 Thus, for example, the landlord of a sports club may be liable in respect of injury

107 A stricter test than under s 2 of the Rent Act 1977 (where the tenant has merely to occupy the dwelling-house as his residence). 108 If a tenant asks for such a statement, the failure to provide it is a criminal offence: Housing Act 1988, s 20A(1) and (4). 109 Housing Act 1988, s 20A inserted by the Housing Act 1996. 110 See 15.7 as to implied terms. 111 Housing Act 1988, s 16. 112 Ibid, s 15. Generally in tenancies where there is a restriction on assigning without consent a landlord is not allowed to withhold consent unreasonably (Landlord and Tenant Act 1927, s 19(1) (and see s 19(1A) in relation to tenancies created after 1995). However, he is allowed to do so in respect of an assured tenancy (Housing Act 1988, s 15(2)). 113 Landlord and Tenant Act 1985, s 13. 114 See 15.7. 115 Ibid, s 12. 116 Cavalier v Pope [1906] AC 428. The position is different in relation to common parts of a multi-tenanted building (eg staircases) which are not let to tenants. 117 This means things which are in disrepair rather than inherently unsafe (Alker v Collingwood Housing Association [2007] EWCA Civ 343, where no liability lay in respect of non-safety glass in a door which had been lawfully installed and which was in good repair). 118 Defective Premises Act 1972, s 4.

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15.31  Landlord and Tenant Relationships Involving the Club suffered by a member of a visiting team or damage to their property. This duty arises when the landlord knows about the defect (whether because he has been told by the tenant or for any other reason) or ought in all the circumstances to have known about it.119 15.31 Security of tenure: fully assured tenancy The only method by which a landlord can obtain possession, other than by the tenant voluntarily leaving, is by obtaining an order from the court having served a notice seeking possession120 relying on one or more of the statutory grounds set out in Schedule 2 to the Act.121 The mandatory grounds include the following: Mandatory grounds: (1) the tenancy is for eight months or less and, within the previous 12 months, had been let for a holiday;122 (2)

the tenancy is for 12 months or less and, within the previous 12 months, had been let to a student by a specified educational establishment;123

(3) the landlord intends to demolish, reconstruct or carry out substantial works in respect of the whole or part of the dwelling-house;124 (4)

the landlord has inherited a periodic tenancy and, within 12 months of death (or, if the court so orders, within 12 months of the landlord learning of death) the landlord elects to seek possession;125

(5)

anti-social behaviour;126

(6)

serious rent arrears (meaning at least two months’ rent at the date of service of the notice of seeking possession and the date of the hearing).127

Discretionary grounds: (i)

the availability of suitable alternative accommodation;128

(ii)

some rent arrears (at the date of service of the notice seeking possession and at the date of issue of proceedings);129

(iii) persistent rent arrears;130 (iv) breach of tenant’s obligation under the tenancy other than arrears of rent;131

119 Defective Premises Act 1972, s 4(2). 120 Housing Act 1988, s 8. 121 Ibid, ss 5 and 7. It should be noted that when a fixed term assured tenancy comes to an end a landlord is not entitled to possession because a statutory periodic assured tenancy immediately arises (Housing Act 1988, s 5(2)). See also footnote 105 as to contemplated legislation. 122 Ground 3. 123 Ground 4. 124 Ground 6. 125 Ground 7. 126 Ground 7A (added by the Anti-social Behaviour, Crime and Policing Act 2014). 127 Ground 8. 128 Ground 9. 129 Ground 10. 130 Ground 11. This ground would apply where there were no actual arrears on the date when proceedings are commenced but the tenant has been persistently late in paying his rent on the due date. 131 Ground 12.

316

Residential tenancies 15.32 (v)

deterioration of the premises through acts of waste or through the neglect or default of the tenant;132

(vi) causing a nuisance or annoyance to adjoining occupiers or having a conviction for using the premises for immoral or illegal purposes;133 domestic violence;134 (vii) conviction of an indictable offence at the scene of a riot;135 (viii) ill-treatment of the furniture provided by the landlord;136 (ix) the premises were let to the tenant in consequence of his employment and that employment has ceased;137 (x)

tenancy induced by false statement of the tenant.138

They are called discretionary grounds because the landlord must additionally satisfy the court that it is reasonable to make an order for possession,139 in contrast to the position with the mandatory grounds which, if established, generally compel the court to make an order.140 It should be noted too that during the currency of a fixed term, it is only open to the landlord to seek possession on one or more of the statutory grounds which involve the tenant’s default and where there is a term of the tenancy which allows the landlord to re-enter or put an early end to the tenancy for breach of covenant.141 Once the fixed term has expired or in the case where the tenancy has always been periodic, then any of the statutory grounds may be relied upon. 15.32 Security of tenure: assured shorthold tenancy142 An AST can now be for a fixed term of less than six months143 or paradoxically for a term (greatly) exceeding six months144 or it may be a periodic tenancy. With effect from 28 February 1997, even though the tenancy may strictly be for a term of less than six months, the landlord will effectively be granting a six-month tenancy in that he will not be able recover possession before the expiry of that period. This six-month period is the extent of the tenant’s security. The time starts running from the grant of the original tenancy, even if the tenancy has been extended by the landlord.145 Because the AST is a species of assured tenancy, it is open to the landlord to seek possession on the statutory grounds in the same way as for fully assured tenants 132 Ground 13. 133 Ground 14. Note that the conduct complained of under this ground need not be that of the tenant but may be that of someone else residing in, or even visiting, the dwelling house. 134 Ground 14A (added by the Housing Act 1996). This ground may be relied upon only by certain social landlords and charitable housing trusts. 135 Ground 14ZA (added by the Anti-social Behaviour, Crime and Policing Act 2014). The conviction may be of the tenant or any adult resident. 136 Ground 15. 137 Ground 16. 138 Ground 17. 139 Housing Act 1988, s 7(4). 140 Ibid, s 7(3). 141 Ibid, s 7(6). 142 The text is dealing with tenancies created after 28 February 1997. Somewhat different rules apply for tenancies created before 28 February 1997. 143 Hitherto an assured shorthold tenancy had to be for a term certain of not less than six months: Housing Act 1988, s 20(1). 144 Although in practice this would very rarely happen. 145 Housing Act 1988, s 21(5), as inserted by Housing Act 1996, s 99.

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15.33  Landlord and Tenant Relationships Involving the Club (see 15.31). Additionally and most importantly, the landlord can obtain possession without establishing fault simply by giving at least two months’ notice requiring possession in accordance with either section 21(1)(a) or 21(4)(a) of the Housing Act  1988 depending on whether the AST is for a fixed term or periodic.146 This notice can be given so as to expire at the end of the initial six-month period. 15.33 Succession There is a limited right to succession under an assured tenancy (including an AST). In the case of a fixed term tenancy then, during the term, the tenancy will pass according to the deceased’s will or, in the absence of a will, according to the rules on intestacy. In the case of a periodic tenancy, only the tenant’s spouse or, since 2004, civil partner, is capable of succeeding to the tenancy (and then, only if the spouse or civil partner occupied the dwelling house as his only or principal home immediately before the tenant’s death).147 Only one succession is permitted. If the deceased tenant was already a successor, there will be no further right of succession.148 It should be noted here that both a fixed-term and a periodic assured tenancy form part of the deceased tenant’s estate and can therefore be passed to a third party under a will or under the rules of intestacy. This new tenant, however, may be unknown to the landlord and an undesirable tenant, to boot; hence the need for the mandatory ground for possession under Ground 7 (see 15.31(4)). 15.34 Excluded tenancies For various policy reasons the Housing Act  1988 excludes from protection certain categories of tenancy, the relevant ones being, as far as clubs are concerned, as follows: (1) high rent accommodation where the rent payable exceeds £100,000 per year;149 (2)

a tenancy where no rent is payable;150

(3)

very low rent accommodation where the rent payable is less than £1,000 per year in London or £250 per year elsewhere;151

(4)

agricultural land exceeding two acres in extent let together with a dwellinghouse;152

(5)

tenancies granted to students;153

(6)

tenancies granted for holidays;154

(7)

agricultural holdings;155 and

146 See 15.37 but see footnote 105 as to contemplated legislation. 147 Housing Act 1988, s 17(1), as amended by the Civil Partnership Act 2004. A common law husband or wife is in the same position as a spouse or civil partner: s 17(4). And see also Ghaidan v Godin-Mendoza [2003] Ch  380, CA. Slightly different rules prevail where the landlord is a private registered provider of social housing (see Housing Act, s 17(1B) and (1C)). 148 Ibid, s 17(1D). 149 Housing Act 1988, Sch 1, para 2; Assured Tenancies (Amendment) (England) Order 2010, SI 2010/908, article 3(2). This Order came into force on 1 October 2010 and applies to England only. 150 Housing Act 1988, Sch 1, para 3. 151 Ibid, Sch 1, para 3A. 152 Ibid, Sch 1, para 6. 153 Ibid, Sch 1, para 8. 154 Ibid, Sch 1, para 9. 155 Ibid, Sch 1, para 7.

318

Residential tenancies 15.37 (8)

business tenancies.156

15.35 Recovery of possession If the tenancy is a fixed-term one and the fixed term expires with the tenant still in occupation, the tenancy simply becomes a statutory periodic tenancy,157 the terms of which are the same as under the contractual fixed-term tenancy.158 If the tenancy is a periodic one in the first place or becomes one and the landlord serves a notice to quit, this will be of no legal effect and the periodic tenancy continues on the same terms.159 Accordingly, there are only two ways of recovering possession: (1)

the tenant leaving voluntarily;

(2)

the landlord obtaining a court order for possession.

15.36 Court order: fully assured tenancy The landlord can only recover possession by establishing one or more of the statutory grounds for possession as set out in 15.31. In all cases he should first serve a ‘notice of seeking possession’ complying with section  8 of the Housing Act  1988 specifying the ground(s) of possession relied upon and specifying sufficient particulars to show the ground is made out.160 Once the section 8 notice has been served and the time specified in the notice has expired, the landlord may then commence possession proceedings. In the event of a mandatory ground being established the order for possession will follow as a matter of course,161 and in the event of a discretionary ground being established the court will make an order for possession only if it is reasonable to do so.162 15.37 Court order: assured shorthold tenancy The landlord may follow the section 8 notice route in the same way and in the same circumstances as for a fully assured tenancy. Over and above this route, he can simply give at least two months’ notice in accordance with section 21:163 (1)

if it is a fixed-term tenancy, the court will make an order for possession where: (a) the term has expired, and no further tenancy is in existence except a periodic AST following on from the expiry date;164 and (b) the tenant has been given not less than two months’ notice165 in writing that possession of the dwelling-house is required by the landlord;166 and

156 Housing Act 1988, Sch 1, para 4. 157 Ibid, s 5(2). 158 Ibid, s 5(3)(e). 159 Ibid, s 5(1). 160 Standard forms are available from various legal stationers and can be obtained on-line at www.oyez.co.uk. The court may dispense with the requirement for such a notice if it considers it ‘just and equitable’ (Housing Act 1988, s 8(1)(b)). 161 Housing Act 1988, s 7(3). 162 Ibid, s 7(4). 163 Such a notice may not be given within four months of the beginning of the tenancy: Housing Act 1988, s 21(4B), (inserted by Deregulation Act 2015). But see footnote 105 as to contemplated legislation. 164 Ibid, s 21(1)(a). 165 In practice, many landlords serve such a notice at the same time as granting the tenancy. 166 Housing Act 1988, s 21(1)(b) as amended by the Housing Act 1996, s 98.

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15.38  Landlord and Tenant Relationships Involving the Club (c) the order for possession will not take effect earlier than six months after the beginning of the tenancy (or the beginning of the original tenancy if the order sought relates to a replacement tenancy);167 (2)

if it is a periodic tenancy, the court will make an order for possession where: (a) the tenant has been given a notice in writing stating that possession is required on a date specified therein (being not earlier than two months after the notice is given);168 and (b) the date specified must be no earlier than the earliest date on which the tenancy could have been brought to an end by a notice to quit, had a notice to quit been served on the same day as the said notice;169 and (c) the order for possession will not take effect earlier than six months after the beginning of the tenancy (or the beginning of the original tenancy if the order sought relates to a replacement tenancy).170

This notice referred to in (1)(b) and (2)(b) above is not a notice to quit so the common law technicalities do not apply171 but even so it is important to comply with the provisions of section  21 of the Housing Act  1988 when giving such a notice, otherwise the notice will be invalid and of no effect.172 Since there may be a risk of arithmetical error in giving the precise expiry date of a periodic tenancy in relation to ASTs in Wales,173 it is wise to use a general formula in the notice, such as: ‘Possession is required of [the property], which you hold as tenant, at the end of the period of your tenancy which will end after the expiry of two months from the service upon you of this notice.’174 15.38 Tenancy deposit schemes Since 6  April 2007 legislation has been in force175 to protect deposits paid to landlords under assured shorthold tenancies and to regulate disputes in relation thereto. There are two different deposit schemes. First, a custodial scheme176 whereby the landlord pays the deposit to the scheme administrator to hold in a separate account until the determination of the tenancy. Secondly, an insurance scheme177 whereby the landlord retains the deposit subject to undertaking to the scheme administrator to comply with the administrator’s directions, such as to pay the deposit to the administrator in the event of a dispute as to whether the deposit should be returned to the tenant at the end of the tenancy. The administrator must insure against the risk of the landlord failing so to comply. In either case the landlord must notify the tenant about the scheme and

167 Housing Act 1988, s 21(5) as inserted by the Housing Act 1996, s 99. 168 Ibid, s 21(4)(a). In Wales, the date specified must, in addition be the last day of a period of a tenancy. This requirement previously applied in England as well, but is changed by Housing Act 1988, s 21(4ZA), inserted by the Deregulation Act 2015. 169 Ibid, s 21(4)(b). 170 Ibid, s 21(5), as inserted by the Housing Act 1996, s 99. 171 Fernandez v McDonald [2004] 1  WLR  1027, CA, at 1033, Spencer v Taylor [2013] EWCA Civ 1600. 172 Ibid. 173 See footnote 168. 174 Notting Hill Trust v Roomus [2006] 1 WLR 1375, CA, at 1379 (and see also Spencer v Taylor [2013] EWCA Civ 1600). 175 Housing Act 2004, ss 212–215. 176 Ibid, Sch 10, para 1(2). 177 Ibid, Sch 10, para 1(3).

320

Discrimination in landlord and tenant matters 15.42 its procedures.178 If a landlord takes a deposit but fails to comply with the deposit scheme procedures a court may order him to return the deposit and pay the tenant a sum up to three times the deposit.179 A  failure to comply with the rules as to tenancy deposits may inhibit a landlord from serving a section 21 notice.180

6.  Discrimination in landlord and tenant matters 15.39 The provisions of the Equality Act  2010 (‘EQA  2010’) as they impact generally on joining, managing and leaving a club have been considered elsewhere in the book.181 Part 4 of the Act (sections 32–38) deals specifically with the disposal, management and occupation of premises, and their potential impact on the club as landlord or tenant will now be considered. 15.40 Disposing of property A  person having the right to dispose of premises182 may not discriminate against183 or victimise184 another person: (1) as to the terms upon which he offers to dispose of the premises to that other;185 (2)

by not disposing of them to that other;186

(3) in his treatment of that other with respect to things done in relation to persons seeking premises.187 Thus a landlord may not refuse to let premises to a potential tenant on the ground that the applicant is the Basset Gay & Lesbian Society. This would amount to sexual orientation discrimination. Similarly, if the Basset Gay & Lesbian Society did successfully obtain a tenancy of the premises but later wished to sublet part, they would not be able to offer that part at a higher price to the Basset AfroCaribbean Society than to any other potential assignee. This would amount to racial discrimination. 15.41 Part 4 of EQA 2010 does not apply to the protected characteristics of age, marriage or civil partnership188 so that a landlord could decline to let premises to the Basset Darby & Joan Club without being in breach of Part 4. 15.42 In addition to the bar on discrimination and victimisation, a person having a right to dispose of premises may not harass another in connection with anything done in relation to the occupation or disposal of those premises.189 It is to be noted

178 Housing Act 2004, s 213(5) and Housing (Tenancy Deposit) (Prescribed Information) Order 2007, SI 2007/797. 179 Housing Act 2004, s 214(3) and (4). 180 Ibid, s 215. 181 See, for example, 4.19–4.26. 182 See Equality Act 2010, s 38(3)–(6). 183 Ibid, s 33(1). See further 4.23. 184 Ibid, s 33(4). See further 4.25. 185 Ibid, s 33(1)(a) or s 33(4)(a) respectively. 186 Ibid, s 33(1)(b) or s 33(4)(b) respectively. 187 Ibid, s 33(1)(c) or s 33(4)(c) respectively. 188 Ibid, s 32(1). 189 Ibid, s 33(3). See further 4.24.

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15.43  Landlord and Tenant Relationships Involving the Club that for the purposes of harassment EQA 2010 excludes pregnancy and maternity190 and that for the purposes of harassment in relation to premises EQA  2010 also excludes religion or belief and sexual orientation.191 15.43 Managing property This brings its own set of rules. A  person who manages premises may not discriminate against192 or victimise193 another who occupies the premises. This may occur: (1) by the way in which the occupant is allowed to make use of a benefit or facility or by the occupant not being allowed to use it at all;194 (2)

by evicting the occupant or taking steps to secure their eviction;195

(3)

by subjecting the occupant to any other detriment.196

Suppose the landlord owned premises divided into two parts with some shared accommodation and he let the premises to two different clubs, the Basset Parent & Toddler Club and the Basset Start Again Club whose members had successfully undergone gender reassignment surgery. The landlord would not be able to prevent members of the latter club using the common toilet facilities which were available for use by the former club nor could he restrict their use by the latter club to certain times of the day. In both instances this would amount to gender reassignment discrimination. 15.44 A manager of premises is also prohibited from harassing an occupant of premises or someone who applies for premises.197 Religion or belief and sexual orientation are excluded characteristics for the purposes of harassment in relation to the management of premises.198 15.45 Disability discrimination and occupation There is a general duty upon associations in relation to the making of reasonable adjustments for disabled persons.199 EQA  2010 makes specific provision in relation to premises200 and in particular places a duty to make these reasonable adjustments on a landlord201 or proposed landlord202 and a person responsible for common parts.203 In a reported fast track trial, the owner of a leisure club (made up of tenants who were automatically members as well as some members of the public) was held to be in breach of statutory duty as a service provider204 by its failure to make reasonable adjustments in relation to a tenant suffering from multiple sclerosis.205 There need not in fact be a letting or proposed letting since a right to occupy suffices to impose

190 Equality Act 2010, s 26(5). 191 Ibid, s 33(6). 192 Ibid, s 35(1). 193 Ibid, s 35(3). 194 Ibid, s 35(1)(a) or s 35(3)(a) respectively. 195 Ibid, s 35(1)(b) or s 35(3)(b) respectively. 196 Ibid, s 35(1)(c) or s 35(3)(c) respectively. 197 Ibid, s 35(2). 198 Ibid, s 35(4). 199 As to which, see 5.78. 200 Equality Act 2010, s 36 and Sch 4. 201 Ibid, s 36(1)(a) and 2(a); see also s 36(1)(d) and (5)(a). 202 Ibid, s 36(1)(b) and 3(a). 203 Ibid, s 36(1)(d). 204 Ibid, s 29. 205 Plummer v Royal Freehold Ltd [2018] 5 WLUK 527.

322

Licences 15.47 the duty,206 so this means a landlord will include a licensor. It is to be noted that the Disability Discrimination (Premises) Regulations 2006207 were revoked on 1 October 2010208 as they were no longer necessary, being superseded by the provisions of EQA 2010.

7. Licences 15.46 Introduction The basic distinction between a tenancy and a licence is that under the former the tenant has exclusive possession of premises and can exclude all the world (including the landlord) whereas under the latter he has no such possession,209 that is to say, the landlord retains a degree of control over the occupied premises. Broadly speaking, there are two situations where a club will come across a licence, the first being when it is itself a licensee of another person and the other is when it acts as employer. An example of the first category may occur where a cricket club is the freehold owner of the club premises and the surrounding cricket field which it uses during the summer months but allows another club in the winter months, say a hockey or football club, to occupy the premises with all its facilities under a licence. An example of the second category may occur where a golf club employs a groundsman to look after its golf course and provides on-site accommodation for the employee. However, unless the groundsman is required to occupy for the better performance of his duties, a tenancy may well be created.210 15.47 Club as licensee What will be involved is a contractual licence, a form of contract enforceable by both the licensor and the licensee,211 and in many ways this will not differ much from a tenancy agreement. The big difference as regards a licence is the lack of security, especially at the end of the licence: the ability to extend rights of occupation for business occupiers212 does not apply. In order to continue at the same premises the club will of necessity have to re-negotiate a new licence on the best terms that it can obtain. It is also important for a club to ensure that it obtains a contractual licence because of the licensor’s power at common law to revoke a bare licence at any time.213 If the club negotiates a fixed-term contractual licence or an express period of notice in a contractual licence without a fixed term it will avoid having to argue that it has ‘a licence coupled with an equity’, that is to say, asking the court to imply a negative contractual term in restraint of revocation before the expiry of the contractual period of the licence; albeit today the courts are much more willing to imply such a term than hitherto.214 A contractual licence

206 Equality Act 2010, s 36(7). 207 SI 2006/887. 208 Equality Act 2010 (Disability) Regulations 2010, SI 2010/2128, reg 15(2)(viii). 209 Street v Mountford [1985] AC 809. 210 Norris v Checksfield [1991] 1 WLR 1241. 211 Verrall v Great Yarmouth Council [1980] 3  WLR  258, CA; Tanner v Tanner [1975] 1 WLR 1346, CA. 212 See 15.15. 213 Thompson v Park [1944 KB 408, CA. Wood v Leadbitter [1845] 13 M & W 838. Albeit that the licensee will be entitled to a ‘period of grace’ in which to pack up and go. In some cases this may be a long time. In Henrietta Barnet School v Hampstead Garden Suburb [1995] EG 55 (CS), eight months was considered insufficient time for a school to relocate. 214 Chandler v Kerley [1978] 1 WLR 693, CA, at 697 (Lord Scarman) (‘where the parties have contracted for a licence, equity today will provide an equitable remedy to protect the legal right’).

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15.48  Landlord and Tenant Relationships Involving the Club held by the club will be held sometimes in the name of trustees and at other times in the name of the club.215 15.48 Club as licensor Since the advent of the commonly used assured shorthold tenancy in 1989 and particularly since it became the default residential tenancy in 1997, the need for landlords to think of devices to avoid the much greater security of tenure enjoyed by regulated tenants under the Rent Acts and by fully assured tenants under the Housing Act 1988 has to a large extent evaporated. The device usually relied on was the licence which gives no security of tenure and where the landlord can obtain a court order for possession without having to rely on any statutory ground or without giving any reason. Many of these so-called licences were exposed in the courts as shams because although on their face they were described as licences the occupants in fact had exclusive possession and were thus tenants.216 However, there is a further type of occupant, namely a service occupant, who is neither a tenant nor, strictly, a licensee, a classic example being the caretaker of premises. If the club employee is genuinely required to occupy the premises or it is necessary for him to do so for the better performance of his duties, then the employee will be neither a licensee nor a tenant (even if he has exclusive possession) but rather a service occupier. This is because the law treats the occupation as being that of the employer rather than the employee and the employee’s right to occupy the premises terminates with their employment.217 Although the label which the parties put on the transaction is not definitive,218 it is still important to use the right terminology when granting a licence, and words like ‘the payment of rent’ should be avoided when granting a licence. 15.49 Protection from eviction At common law when a tenancy or licence comes to an end the landlord or licensor is entitled to re-enter and take possession of the premises. However, the Protection from Eviction Act 1977 provides a measure of assistance to those residential occupiers who are not protected under the Rent Act 1977 or the Housing Act 1988, and to licensees who have no other statutory protection once their contractual entitlement to occupy has come to an end. For example, if a residential tenancy or licence has come to an end and the occupier continues to reside in the premises, it will be a criminal offence to deprive the occupier of possession save through a court order219 or unlawfully to harass him.220 The fact that criminal proceedings are taken under the 1977 Act will not prejudice the right of the occupier to seek a civil remedy against the landlord or licensor, such as damages for a breach of the covenant for quiet enjoyment.221 Even trespassers who have never been tenants or licensees have protection: it may be an offence, without lawful authority, to use or threaten violence to secure entry into premises if there is someone present on the premises who is opposed to such entry and the person using or threatening such violence knows that to be the case.222 It is for this reason that trespassers post notices referring to the offence on occupied buildings. It should also be noted that, in addition to damages at common law, a residential

215 See 15.5. 216 See eg Antoniades v Villiers [1990] 1 AC 417. 217 Glasgow Corpn v Johnstone [1965] AC 609; Norris v Checksfield [1991] 1 WLR 1241. 218 Crancour v Da Silvaesa [1986] 1 EGLR 80, CA. 219 Protection from Eviction Act 1977, s 3(1). 220 Ibid, ss 1(2) and (3). 221 Ibid, s 1(5). 222 Criminal Law Act 1977, s 6(1).

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Proprietary clubs 15.50 tenant may be able to claim very substantial damages for unlawful eviction under sections 27 and 28 of the Housing Act 1988.

8.  Proprietary clubs 15.50 Whether the proprietor is the freehold or leasehold owner of the club premises, the club will be either the licensee of the proprietor if it is a separate entity or the proprietor himself will be in occupation of the premises. In either event there will be no question of the club having protection under Part II of the Landlord and Tenant Act  1954 nor will the club have any landlord and tenant relationship with the proprietor’s employees.223

223 Baird v Wells (1890) 44 Ch D 661.

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Chapter 16

The Club’s Employment of Third Parties

1. Introduction 16.1 Clubs are frequently employers of staff. This employment brings in its wake a whole raft of statutory law and regulation. The potential liability of employing a significant number of staff is such that it has led one writer1 to advocate that this factor alone should make an unincorporated members’ club give careful thought to some form of corporate status as a protection from liability. We do not dissent from the proposition that such a club should give careful thought to this topic, but instead our emphasis would be that the employment of staff requires the managing committee to pay close attention to employment law if the club is to avoid its potential exposure to liability. There is detailed guidance on the government website covering specific areas of employment law (eg unfair dismissal, maternity and parental rights, redundancy payments etc) which are helpful to lawyers and non-lawyers alike to understand the position.2 The following paragraphs are intended to give an outline of the main areas of employment law which clubs of whatever type are likely to encounter when employing staff.3 16.2 What is employment This point has already been touched upon when considering the club’s liability for torts.4 The distinction here is between a contract of service (or a contract of employment in modern parlance) under which an employee will work and a contract for services under which an independent contractor (or self-employed person) will provide services to the employer. There is no one simple test for discerning the difference between an employee and a selfemployed person. The label which the parties themselves give to the relationship is not decisive; one has to look at the reality of the situation and all the terms of the contract will be looked at objectively in order to arrive at the right answer.5 The following are generally considered to be essential to a contract of employment: (1)

an obligation on the employee to work personally;6

1 Warburton on Unincorporated Associations (2nd edn, 1992) p 92. 2 See www.gov.uk. 3 See Harvey on Industrial Relations and Employment Law (looseleaf) for detailed guidance. 4 See 13.33. 5 Carmichael v National Power plc [1999] 1 WLR 2042, HL, at 2049C (Lord Hoffmann). 6 Express & Echo Publications  Ltd v Tanton [1999]  IRLR  367; cf Macfarlane v Glasgow CC [2001] IRLR 7.

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16.3  The Club’s Employment of Third Parties (2) a mutuality of obligation (usually an obligation on the part of the employer to make work available and a corresponding obligation on the employee to carry out the work);7 (3)

a right by the employer to exercise a degree of control over the way in which the work is carried out.8

16.3 If these minimum requirements are met, other factors, such as stipulations as to hours of work, whether holiday pay is paid, who provides the tools and equipment, who bears the loss and how the contract is terminated, are looked at to see whether the contract can properly be characterised as one of employment.9 By way of an example, a professional at a golf club may well satisfy the essential requirements of a contract of employment but the unusually relaxed terms under which golf professionals tend to work might mean that he could not be properly characterised as an employee. The distinction is significant because many of the more important statutory rights do not apply to a contract for services. 16.4 Who is the employer? In the case of community and company clubs the question poses no problem because the club has a separate existence from its members. The problem arises in the case of unincorporated clubs which have no legal personality. In the ordinary course of events the managing committee would be the employer, as it is they who control the affairs of the club.10 It is true that in Campbell v Thompson and Shill11 Mr Justice Pritchard held that the employer of the plaintiff, a cleaner, was the whole membership of 2,500 of the City Livery Club but such a decision is very unlikely to be repeated today.

2.  Contract of employment 16.5 Notwithstanding the weight of statutory intervention the contract of employment remains the basis of the relationship between the employer and the employee. Although a contract of employment may be either written or oral or partly both, it is better practice for the employer to provide the employee with a contract in writing. The written contract should identify such parts of the staff handbook or other document as to which the employer wishes to give contractual effect. 16.6 The employer must in any event give the employee a written statement of particulars of certain terms of his contract not later than the first day of his employment.12 There is an obviously sound reason for this requirement. When disputes arise or are referred to an employment tribunal, it is essential that each side knows what its rights and obligations are, and many a time the first area of dispute is what was agreed between the parties. The following statutory particulars must be set down:13

7 8 9 10 11 12 13

Carmichael v National Power  plc [1999] 1  WLR  2042,  HL: Stringfellows Restaurants Ltd v Quashie [2012] EWCA Civ 1735. Ready Mixed Concrete v Minister of Pensions and National Insurance [1968] 2 QB 497. Hall v Lorimer [1994] ICR 218. Affleck v Newcastle Mind [1999] 1 ICR 852, EAT, at 854 (Morrison J). [1953] 2 WLR 656. Employment Rights Act 1996, s 1(1). Ibid, s 1(3)–(5).

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Contract of employment 16.6 (1)

the names of the employer and the employee;

(2)

the date when the employment began;

(3)

the date on which the employee’s continuous employment began;14

(4) the scale or rate of remuneration, or the method of calculating the remuneration; (5)

the interval at which remuneration is paid (eg weekly, monthly);

(6)

the terms and conditions relating to hours of work, including the days of the week that the employee is required to work and whether (and, if so, how) the hours and days may vary;

(7)

any terms relating to: (a) holidays and holiday pay (b) sick pay (c) any other paid leave (d) pensions and any other employment benefits;

(8)

the length of notice the employee is obliged to give and entitled to receive to terminate the contract of employment;

(9)

the job title or a brief description of the employee’s work;

(10) where the employment is not intended to be permanent, the period for which it is expected to continue or, if it is for a fixed term, the date when it is to end; (11) the conditions and duration of any probationary period; (12) either the place of work or, where the employee is required or permitted to work at various places, an indication of those places and the employer’s address; (13) any collective agreements which directly affect the terms and conditions of the employment; (14) where the employee is required to work outside the UK for more than a month, certain further particulars like the currency of remuneration; (15) any disciplinary rules applicable to the employee (or referring to some accessible document containing these rules); (16) the identity of the person: (a) to whom the employee can apply if he is dissatisfied with any disciplinary decision or any decision to dismiss him; (b) to whom the employee can apply for the purpose of seeking redress of any grievance relating to his employment and the manner in which such application should be made (or referring to some accessible document containing the procedure).15 14 As to continuous employment, see 16.9. 15 As to items (1)–(13), see the Employment Rights Act 1996, s 1(3)–(5). As to items (14) and (15) see s 3 of this Act. Items (14) and (15) do not apply to procedures relating to health and safety: Employment Rights Act 1996, s 3(2).

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16.7  The Club’s Employment of Third Parties 16.7 It is not compulsory for the contract of employment to set forth the terms and conditions relating to all the above items. What is required is notice of any terms agreed. One matter of importance which should always be in writing is an adequate job description so that both sides know precisely what is expected of the employee in carrying out his employment. If the contract does not include any particular item, eg no contractual pension is provided, the statement should say so.16 It also has to be understood that the statutory written statement is not the contract of employment itself nor conclusive evidence of it,17 but in many cases the employer and employee will be content to treat this statement as evidence of a binding contract of employment. Likewise a written contract can itself be relied upon as the statement of particulars so long as it includes all the necessary statutory information. 16.8 Implied terms  In addition to the terms expressly agreed between the parties, there are terms which may be implied into the contract of employment on the grounds either that they reflect the obvious (albeit unexpressed) intention of the parties; or that they are necessary to give business efficacy to the contract; or that they reflect the usual (ie ‘reasonable, certain and notorious’) custom and practice of the particular employer; or that they are implied by virtue of a specific statutory provision. Examples of terms commonly implied into contracts of employment are: (1) on the part of the employee, that he will carry out his duties with due diligence and care; that he will obey lawful and reasonable orders; that he will serve his employer with fidelity and in good faith; and that he will not disclose confidential information;18 (2)

on the part of the employer, that he will not without reasonable and proper cause conduct himself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence which exists between employer and employee.19

A  term will not be implied if to do so would contradict an express term of the contract.20 16.9 Continuous employment This is a concept which is important for many of the statutory employment rights, such as the right to claim a redundancy payment or compensation for unfair dismissal, which are conferred only on those employees who have accrued a sufficient period of continuous employment. There are technical rules (outside the scope of this book) as to what does and does not count as continuous employment. Broadly speaking, any week during the whole or part of which the employee’s relationship was governed by a contract of employment counts towards continuous employment.21 Periods of part-time employment, irrespective of the number of hours worked per week, still count in the computation of continuous employment. Continuity will not be broken by periods of maternity leave, sickness absence, or absence due to a temporary cessation of work.22

16 17 18 19 20 21 22

Employment Rights Acts 1996, s 2(1). Robertson v British Gas Corporation [1983] ICR 351, CA. Chitty on Contracts (33rd edn, 2019) at 40-059–40-066. Malik v Bank of Credit and Commerce International SA [1998] AC 20. Duke of Westminster v Guild [1985] QB 688, CA, at 700. Employment Rights Act 1996, s 212(1). Even if there is no contract of employment in existence during these periods: ibid, s 212(3).

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Contract of employment 16.13 16.10 Continuity is preserved if an employee is transferred to an ‘associated employer’, eg a subsidiary or sister company of the previous employer,23 or if the transfer is the result of a ‘transfer of undertaking’, eg on the purchase of the previous employer’s business.24 Likewise, the death of an employer does not break continuity nor does a change in partners, personal representatives or trustees.25 Where the employee in an unincorporated members’ club is employed by the managing committee (as is the norm) any change in the composition of the Committee has no bearing on the continuity of the employment.26 This would remain the case even if the entire Committee was replaced at one particular election. 16.11 Part-time employees Part-time workers have the right not to be treated less favourably than comparable full-time workers, whether as regards the terms of their contract or by being subjected to a detriment. In determining whether a part-time worker has been treated less favourably, where appropriate a pro rata principle is applied (eg  in relation to pay and other benefits). If the employee establishes less favourable treatment, then the burden moves to the employer to justify it on objective grounds. This protection is particularly relevant to employees’ contractual benefits such as membership of a bonus scheme or an occupational pension scheme. Employers should be careful not to exclude part-time workers from membership of such schemes unless there are proper reasons for doing so.27 16.12 Fixed-term employees Fixed-term employees are employed under a contract which is due to terminate on the expiry of a specific term; on the completion of a particular task; or on the occurrence or non-occurrence of a specific event other than normal retirement age. As with part-time workers, fixedterm employees have the right not to be treated less favourably than comparable permanent employees, whether as regards the terms of their employment or by being subjected to a detriment. In determining whether a fixed-term employee has been treated less favourably, where appropriate a pro rata principle is applied. If the employee establishes less favourable treatment, then the burden moves to the employer to justify it on objective grounds. Treatment can be justified on the grounds that the terms of the fixed-term contract taken as a whole are at least as favourable as those of the comparable permanent employee.28 A  fixed-term employee also has the right to become a permanent employee if he has been continuously employed under fixed-term contracts for more than four years, unless the employer can show an objective justification for the employee not becoming permanent. 16.13 Both part-time and fixed-term employees can present a complaint of less favourable treatment to the employment tribunal within three months of the date of the less favourable treatment. This period can be extended if the tribunal thinks it just and equitable to do so.29 The tribunal may make a declaration as to the 23 24 25 26 27

Employment Rights Act 1996, s 218(6). Ibid, s 218(2). Ibid, s 218(4) and (5). Affleck v Newcastle Mind [1999] 1 ICR 852, EAT, at 854. See the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations  2000, SI 2000/1551. 28 See the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, SI 2002/2034. 29 The time limits can be paused by the early conciliation process: see s 207B of the Employment Rights Act 1996 and the Employment Tribunals (Early Conciliation: Exemption and Rules of Procedure) Regulations 2014, SI 2014/254.

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16.14  The Club’s Employment of Third Parties parties’ rights; make an order for compensation; or make recommendations to reduce or obviate the effect of the less favourable treatment.30

3. Pay 16.14 The question of pay is primarily governed by the terms of the contract of employment, the particulars of which must form part of the statutory written particulars.31 Some important payment rights, however, are regulated by statute and these rights are discussed below. 16.15 Minimum wage From 1 April 2020 the minimum wage for those aged 25 years and over is £8.72 per hour, for those aged 21 to 24 it is £8.20 per hour, for those aged 18 to 20 years it is £6.45 per hour and for those aged under 18 years who are no longer of compulsory school age32 it is £4.55 per hour.33 The employer must maintain records of hours worked and payments made. The employee may request inspection of these records and ask for a copy of them.34 16.16 Holiday pay An employee has a statutory right of up to 5.6 working weeks’ paid annual leave (basic and additional) subject to an aggregate maximum of 28 working days a year.35 There is no continuous-employment requirement to qualify for this right but during the first year of employment leave is deemed to accrue at the rate of one-twelfth of the annual entitlement at the beginning of each month of employment, and the entitlement to take leave is limited during the first year to the amount of leave that is deemed to have accrued under this formula at the time of taking the leave, less any leave already taken. The employee is entitled to be paid for any period of leave at the rate of one week’s pay for each week of leave. If the contractual holiday rights are more generous than the statutory rights, the contractual rights will apply. Bank Holidays should count as paid holiday days.36 An employer cannot contract out of the holiday pay provisions.37 16.17 Sick pay If there is no sick pay entitlement under the contract of employment the employee may be entitled to statutory sick pay. Generally speaking, the entitlement is 28 weeks. In order to qualify for statutory sick pay the employee must have four or more consecutive days of sickness during which he is too ill to work; he must notify his employer of his absence; and he must supply evidence of his incapacity to work.38 Certain categories of employee are excluded from 30 See reg  7 of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations  2000, SI  2000/1551 and reg  8 of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, SI 2002/2034. 31 See 16.6. 32 In England and Wales a person is no longer of compulsory school age after the last Friday of June of the school year in which their 16th birthday occurs. 33 National Minimum Wage (Amendment) Regulations 2020, SI 2020/338. 34 See the National Minimum Wage Act  1998, s  10 and the National Minimum Wage Regulations 2015, SI 2015/621, as amended. 35 Working Time Regulations 1998, SI 1998/1833, as amended, regs 13(1) and 13A. Thus, eg 5 working days per week × 5.6 holiday weeks = 28 days paid holiday. 36 Tucker v British Leyland Motor Corporation Ltd [1978] IRLR 493, at 496. 37 Working Time Regulations 1998, as amended, reg 35. 38 Social Security Contributions and Benefits Act  1992, ss  151–152; Social Security Administration Act  1992, s  14; and Statutory Sick Pay (General) Regulations  1982, SI 1982/894, as amended, reg 7.

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Pay 16.20 the entitlement to statutory sick pay, most notably those whose average weekly earnings are less than the weekly lower earnings limit for paying national insurance contributions, presently (2020) £120 per week.39 The amount of statutory sick pay is currently (2020) £95.85 per week. If an employer refuses to pay statutory sick pay the employee can ask for written reasons for that decision.40 The employee can then appeal to HMRC, who will consider whether he is so entitled.41 16.18 Maternity pay An employer is obliged to pay statutory maternity pay (‘SMP’) to an employee on maternity leave; the employer is able to recoup a significant proportion of these payments from the government. In order to qualify for SMP the employee must, first, have been continuously employed by her employer for at least 26 weeks ending with the week immediately preceding the 14th week before her expected week of confinement (‘EWCo’). Secondly, her normal weekly earnings for the period of eight weeks ending with the week immediately preceding the 14th week before EWCo must not be less than the lower limit for the payment of national insurance contributions, presently (2020) £120 per week. Thirdly, she must still be pregnant at the 11th week before her EWCo, or have had the baby at that time.42 16.19 A qualifying employee is entitled to SMP for a period of up to 39 weeks commencing when the employee, having given proper notice, stops work. This start may not be earlier than the 11th week before EWCo nor later than the week immediately following the week of confinement.43 This means that the employee, if she wishes, can continue to work until the date of confinement and not lose her entitlement to SMP. The notice in question is 28 days.44 The employee must provide a maternity certificate signed by a doctor or midwife as evidence of her pregnancy and of the expected date of confinement.45 The amount of SMP is currently (2020) as follows: for the first six weeks of the maternity-pay period it is 90% of the employee’s normal weekly earnings for the period of eight weeks immediately preceding the 14th week before EWCo.46 Thereafter it is a payment of £151.20 per week or 90% of the employee’s normal weekly earnings, whichever is lower. 16.20 In 2014 the Government introduced a scheme for sharing parental leave and pay.47 Under the terms of the scheme an employee can curtail her entitlement to SMP and convert it to shared statutory parental pay (‘SSPP’). The employee and a second person (who must be the child’s father or the employee’s partner and must share responsibility for the child) can then share SSPP for the remainder of the period for which the employee would otherwise have been entitled to SMP. The employee and the second person must satisfy certain eligibility criteria relating

39 Social Security Contributions and Benefits Act 1992, as amended, Sch 11; Social Security Act 1985, s 18(2); and the Statutory Sick Pay (General) Regulations 1982, SI 1982/894, as amended. 40 Social Security Administration 1992, s 14(3). 41 Statutory Sick Pay and Statutory Maternity Pay (Decisions) Regulations 1999, SI 1999/776. 42 Social Security Contributions and Benefits Act  1992, s  164(1)–(2) and the Statutory Maternity Pay (General) Regulations 1986, SI 1986/1960. 43 Ibid, s 165, as amended. 44 Employment Act 2002, s 20. 45 Social Security Administration Act 1992, s 15. 46 Social Security Contributions and Benefits Act 1992, s 166. 47 Social Security Contributions and Benefits Act 1992, ss 171ZU–171ZZ5 and the Statutory Shared Parental Pay (General) Regulations 2014, SI 2014/3051.

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16.21  The Club’s Employment of Third Parties to the length of their employment and the amount of their pay. They must also give at least eight weeks’ notice of their intention to curtail the SMP and take SSPP. The detailed eligibility and notice provisions of the scheme can be found on the government website. SSPP is calculated in the same way as SMP, ie it is currently (2020) £151.20 per week or 90% of normal earnings, whichever is the lower. 16.21 Paternity pay An employer is obliged to pay up to two weeks’ statutory paternity pay to an employee on paternity leave. The employee must have the same period of continuous employment as would qualify for SMP. He must also be the father of the child or the partner of the child’s mother, and have a responsibility for bringing up the child. Currently (2020) SMP is the lower of £151.20 or 90% of the employee’s normal weekly earnings.48 16.22 Deductions Deductions may be made from wages either because it is required by statute (eg an attachment of earnings order); or it is permitted by the terms of the contract of employment; or the employee has given his prior written consent to the deduction.49 If the deduction is made pursuant to a term of the contract of employment, that term must have been shown to the employee (or, if not in writing, its effect notified in writing) before the deduction is made.50 Wages in this context include any bonus, commission, holiday pay, statutory sick pay and statutory maternity pay.51 Excluded from the definition of wages are, for example, payments in respect of expenses incurred by the employee in carrying out his job; payments by way of pension; and redundancy payments.52 The employee’s remedy for wrongful deductions is to make a complaint to the employment tribunal within three months of the deduction being made.53 16.23 PAYE and NIC The wages of the club’s employees are subject to income tax.54 The employee’s tax will be deducted at source under the Pay as You Earn scheme.55 National Insurance Contributions, in effect another form of taxation, are payable by the club as employer and by the employee.56

4.  Maternity and other leave 16.24 Maternity leave Female employees have a statutory entitlement to maternity leave57 and maternity pay.58 If their contract of employment also

48 49 50 51 52 53 54 55 56 57 58

Statutory Paternity Pay and Adoption Pay (General) Regulations 2002, SI 2002/2818. Employment Rights Act 1996, ss 13(1), 15(1). Ibid, ss 14 and 15. Ibid, s 27(1). Ibid, s 27(2). Ibid, s 23. There is a discretionary power to extend this time limit if the tribunal is satisfied that it was not reasonably practicable to present the claim within the three-month period: s 23(4). Income Tax (Earnings and Pensions) Act 2003, Part 2 (ss 3–61J). The Act imposes a charge to tax on employment income. This system broadly retains the effect of the former Schedule E tax on emoluments. Ibid, Part 11 (ss 682–712). National Insurance Contributions and Statutory Payments Act 2004. Employment Rights Act 1996, ss 71–75. There are similar provisions for adoptive leave. Social Security Contributions and Benefits Act  1992, as amended. The main regulations are Statutory Maternity Pay (General) Regulations 1986, SI 1986/1960. There are similar provisions for adoptive pay.

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Maternity and other leave 16.29 includes a contractual entitlement to maternity leave and maternity pay then they can choose whichever scheme is more favourable. The statutory scheme is both detailed and oddly complex. Its main provisions are set out below. 16.25 Compulsory maternity leave An employer must not allow an employee to work for at least two weeks commencing with the day on which childbirth occurs.59 16.26 Ordinary maternity leave An employee is entitled to ordinary maternity leave (‘OML’) of 26 weeks. Her OML starts on the earliest of the following dates: (1) the date notified by the employee as the date on which she intends her period of OML to commence (which must be no earlier than the beginning of the 11th week before the expected week of childbirth (‘EWCh’); (2) the first day on which the employee is absent from work wholly or partly because of pregnancy or childbirth after the beginning of the fourth week before EWCh; or (3)

the day after the day on which childbirth occurs.60

An employee’s entitlement to OML is conditional upon her giving her employer proper notice of her OML.61 Having received such notice, the employer must confirm when the employee’s OML (or, if applicable, her additional maternity leave) is due to end. The employee must give 28 days’ notice if she intends to return early.62 16.27 At the end of her OML an employee is entitled to return to her previous job unless during her OML she has been made redundant. She is entitled to return on terms and conditions no less favourable than those that she would have enjoyed had she not been absent, eg with the benefit of any pay rises awarded during her absence.63 16.28 Additional maternity leave An employee is entitled to an additional maternity leave (‘AML’) of 26 weeks commencing at the end of her OML.64 At the end of her AML, unless she has been made redundant, she is entitled to return to her previous job or, if that is not reasonably practicable, to another job which is both suitable and appropriate.65 That new job must itself be on terms and conditions not less favourable than those which would have applied had she not been absent.66 16.29 Shared parental leave In 2014 the Government introduced a scheme for shared parental leave (‘SPL’).67 Under the terms of the scheme an employee can curtail her entitlement to maternity leave and convert it to SPL. The employee and a second person (who must be the child’s father or the employee’s partner and must share responsibility for the child) can then share the SPL for the remainder of the 59 60 61 62 63 64 65 66 67

Employment Rights Act 1996, s 72. Maternity and Parental Leave Regulations 1999, SI 1999/3312, as amended, reg 6. Ibid, as amended, reg 4. Maternity and Parental Leave Regulations 1999, SI 1999/3312, reg 11(1). Ibid, reg 18A. Ibid, regs 5–7. Ibid, reg 18A. Ibid, reg 18(2). Social Security Contributions and Benefits Act 1992, ss 171ZU–171ZZ5.

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16.30  The Club’s Employment of Third Parties period for which the employee would otherwise have been entitled to maternity leave. The employee and the second person must satisfy certain eligibility criteria relating to the length of their employment and the amount of their pay. They must also give at least eight weeks’ notice of their intention to curtail the employee’s maternity leave and to take SPL. The detailed eligibility and notice provisions of the scheme can be found on the government website. 16.30 Paternity leave In order to qualify the employee must have been continuously employed for at least 26 weeks ending with the week immediately preceding the 14th week before EWCo. The employee must be either the child’s father and have, or expect to have, responsibility for the child’s upbringing; or be married to or be the partner of the child’s mother and have the main responsibility for the upbringing of the child. The leave may be taken at any time during the period of 56 days commencing with the child’s birth or the first day of EWCo. As with maternity leave, the employee’s entitlement is conditional upon him giving the proper notice. At the end of his leave the employee is entitled to return to the same job (or, if that is not reasonably practicable, to another job which is suitable and appropriate) on the same terms and conditions as if he had not taken leave. An employer cannot contract out of the obligation to provide paternity leave and pay.68 16.31 Parental leave An employee who has been continuously employed for a year and has or expects to have responsibility for a child is entitled to 18 weeks unpaid parental leave for each child. Each parent is, however, limited to four weeks for each child in any one year.69 16.32 Time off work Employees have additional rights to take time off work in a variety of situations including: (1) time off with pay for the purpose of trade union official duties; or for antenatal appointments; or to enable an employee under notice of redundancy to look for alternative employment;70 (2) time off without pay for the purpose of trade union activities and representation; or for public duties (eg sitting as a magistrate).71

5.  Right not to suffer detriment 16.33 An employee’s primary statutory rights, eg to maternity leave, paternity leave, etc are in most cases reinforced by a corresponding secondary right not to be subjected to a detriment for exercising the primary right.72 In addition, there are particular activities which do not involve the exercise of a statutory right but which Parliament has chosen to protect by a right not to be subjected to a detriment for carrying out the activity, as are set out below. An employee who has 68 See the Paternity and Adoption Leave Regulations 2002, SI 2002/2788. 69 See the Maternity and Parental Leave Regulations 1999, as amended, regs 13–20. 70 Trade Union and Labour Relations (Consolidation) Act 1992, s 168; Employment Relations Act 1999, ss 52, 55. 71 Trade Union and Labour Relations (Consolidation) Act 1992, s 170; Employment Relations Act 1999, s 50. 72 Eg Maternity and Parental Leave Regulations  1999, SI  1999/3312, as amended, reg  19; Paternity and Adoption Leave Regulations 2002, SI 2002/2788, reg 28.

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Health and safety at work 16.37 been unlawfully subjected to a detriment at work can present a complaint to the employment tribunal if he does so within three months beginning with the date on which the detriment occurred or within such further period as the tribunal considers reasonable if it was not reasonably practicable for the complaint to be presented within the three-month period.73 The tribunal will declare the claim to be well founded and may award such compensation as it considers just and equitable in all the circumstances. 16.34 Trade union activities It is unlawful for an employer to subject his employee to a detriment for membership of, or for taking part in the activities of, a trade union.74 It should be noted that, in this context, the purpose of a particular course of action by the employer is determined by the object which the employer desires to achieve rather than the consequences of that course of action. 16.35 Health and safety activities An employee has a right not to suffer detriment on grounds connected with health and safety.75 This protection applies particularly to employees who are carrying out health and safety duties assigned to them; or who are health and safety representatives; or who, in the absence of a health and safety representative, bring health and safety issues to the attention of their employers and are subjected to a detriment as a result. 16.36 ‘Whistleblowing’ An employee has the right not to suffer detriment because he has made a public interest disclosure. These provisions apply to employees who make protected disclosures of qualifying information.76 ‘Qualifying information’ is information which, in the reasonable belief of the employee, is in the public interest and tends to show that there has been or is likely to be: a crime; a breach of other legal obligation; a miscarriage of justice; a danger to health and safety; or damage to the environment; or to show that one of the above matters has been or is likely to be deliberately concealed.77 The disclosure of this information to an employer or to another person whom the employee reasonably believes is responsible for the failure is ‘protected’. Disclosure to certain prescribed persons, eg HMRC and the Health and Safety Executive is also ‘protected’ if the employee reasonably believes that the information is relevant to the prescribed person and that it is true. Disclosure in good faith to other third parties is also ‘protected’ if the employee reasonably believes that the information is true; the disclosure is not made for personal gain; the disclosure is reasonable; and there has been prior disclosure to the employer. Disclosure to third parties without prior disclosure to the employer is ‘protected’ only in more limited circumstances.78

6.  Health and safety at work 16.37 An employer is under a common law duty to have regard to the safety of his employees. Statutory obligations have also been imposed on the employer, 73 The time limits can be paused by the early conciliation process: see s 207B of the Employment Rights Act 1996 and the Employment Tribunals (Early Conciliation: Exemption and Rules of Procedure) Regulations 2014, SI 2014/254. 74 Trade Union and Labour Relations (Consolidation) Act 1992, s 146. 75 Employment Rights Act 1996, s 44. 76 Ibid, s 43A and 43B as amended. 77 Ibid, s 43B. 78 Ibid, ss 43C–43H as amended.

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16.38  The Club’s Employment of Third Parties mainly by the Health and Safety at Work etc Act 1974 and the regulations published under it. Breach of the provisions of the 1974 Act and the regulations thereunder gives rise to criminal liability79 but does not generally give rise to civil liability.80 16.38 Broadly speaking, the 1974 Act contains provisions which correspond to the general common law duty imposed on an employer to take reasonable care of the safety of its employee. In addition, the Act imposes more specific duties. For example, where an employer employs five or more employees,81 the employer must prepare (and revise, if necessary) a written statement of its general policy with respect to the health and safety of its employees, which is to be displayed on an easily accessible notice board.82 In addition, information as to health, safety and welfare must be given to employees by means of posters and leaflets approved and published by the Health and Safety Executive.83 16.39 Over the last 20 years a wide range of regulations have been published under the 1974 Act to implement the various EU directives relating to health and safety at work. Although these regulations do not directly give rise to civil liability, they are relevant to determining the standard of care required by the common law duty. It is therefore convenient to consider the common law and statutory duties together. They may be summarised as follows:84 (1)

safe place of work: the employer is under a common law duty to provide a reasonably safe place of work and means of access to work. The Workplace (Health, Safety and Welfare) Regulations 1992 now impose a statutory duty to ensure that workplaces are made and kept in an efficient state, efficient working order and good repair.85 The regulations also include a range of specific requirements relating to lighting, cleanliness, room dimensions, arrangement of workstations, spillages and obstructions on floors etc;86

(2)

safe system of work: at common law the employer’s duty is to take reasonable steps to provide a system which will be reasonably safe, having regard to the nature of the work being carried out. Long established practice is usually regarded as strong evidence that the system being operated is a reasonable one.87 Providing a safe system of work by itself is not sufficient. The employer must take such steps as are reasonably practicable to implement the system. The system must also now comply with such regulations as relate to the work being undertaken. There are a myriad of regulations covering such topics as noise at work, handling dangerous substances, construction work and asbestos.88 The following regulations are likely to have most practical significance for clubs:

79 Health and Safety at Work etc Act 1974, s 33. 80 Ibid, s 47(2) as amended by the Enterprise and Regulatory Reform Act 2013, s 69(1), (3). 81 See the Employers’ Health and Safety Policy Statements (Exception) Regulations  1975, SI 1975/1584. 82 Health and Safety at Work etc Act 1974, s 2(3). 83 See the Health and Safety Information for Employees Regulations 1989, SI 1989/682. 84 See Munkman on Employers’ Liability (17th edn, 2019) for more detailed guidance. 85 See Workplace (Health, Safety and Welfare) Regulations 1992, SI 1992/3004, reg 5. 86 Ibid, regs 8–12. 87 General Cleaning Contractors Ltd v Christmas [1953] AC 180, at 195. 88 The complete and annotated health and safety regulations are to be found in Redgrave’s Health and Safety (9th edn, 2016).

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Health and safety at work 16.40 (a) the Management of Health and Safety at Work Regulations 1999:89 these regulations require employers to put in place a proper health and safety procedure. In particular regulation 3 requires employers to carry out risk assessments of the work to be undertaken by their employees; (b) the Manual Handling Operations Regulations 1992:90 these regulations require employers, inter alia, to take steps to reduce the risk of injury from manual handling operations to the lowest level reasonably practicable. Manual handling operations are widely defined to include most manual tasks but the regulations particularly apply to lifting; (c) the Health and Safety (Display Screen Equipment) Regulations  1992:91 these regulations require employers to ensure that the workstations of employees who use computers are properly set up so as to reduce the risk of their developing conditions such as repetitive strain injuries; (3)

safe equipment and materials: at common law an employer’s duty is to take reasonable steps to provide equipment, materials and clothing which allow the employee to carry out his work in safety. The Provision and Use of Work Equipment Regulations 1998 now impose on employers a statutory duty to ensure that work equipment is suitable for the purposes for which it was provided and that the equipment is maintained in an efficient state, in efficient working order and in good repair.92 The regulations also include a range of specific requirements relating to such matters as training, lighting, dangerous parts, etc.93 The Personal Protective Equipment at Work Regulations 199294 impose similar obligations in relation to protective equipment, eg  gloves, hats, goggles, etc;

(4)

competent fellow employees: the employer’s duty is to provide competent fellow employees. So the known inadequacy of a particular employee should not be tolerated. In addition, under the doctrine of vicarious liability95 the employer is liable for the acts of his employee if they are committed in the course of his employment, so that the negligent act of one employee towards another employee causing injury will render the employer liable to the injured employee. Any term in the contract of employment excluding this liability is void.96

16.40 If an employee establishes a breach of his employer’s common law or statutory duties then the employee is entitled to damages for his injury and for the past and future losses consequent upon the injury. These damages will be reduced by the extent to which the employee’s negligence (if any) contributed to his injury.97

89 SI 1999/3242. 90 SI 1992/2793. See especially reg 4. 91 SI 1992/2792. 92 SI 1998/2306. See regs 4 and 5. 93 Ibid, regs 9, 11 and 21. 94 SI 1992/2966. 95 See 13.32. 96 Law Reform (Personal Injuries) Act  1948, s  1(3) (which Act abolished the doctrine of common employment). 97 See generally Munkman on Employers’ Liability (17th edn, 2019).

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16.41  The Club’s Employment of Third Parties 16.41 Compulsory insurance Every employer carrying on a business98 must maintain insurance, under one or more approved policies with an authorised insurer, against liability for bodily injury or diseases sustained by employees arising out of and in the course of their employment in Great Britain.99 The sum insured must not be less than £5 million in respect of any one occurrence.100 The insurer’s annual certificate must be displayed at every place where the employer carries on business and be easily seen and read by every person employed there.

7.  Termination of the contract of employment 16.42 Modes of termination The contract may be terminated in various ways: (1)

by mutual agreement;

(2)

by expiry of the fixed term of employment: in certain circumstances this expiry may qualify for compensation for unfair dismissal or a redundancy payment;

(3)

by frustration of the contract: (a) frustration occurs where the performance of the contract becomes impossible or substantially different from the contract contemplated at the outset by the parties through some unforeseen event and through no fault of the parties;101 (b) termination of the contract is automatic, so there can be no claim for unfair or wrongful dismissal or for a redundancy payment;

(4)

by notice of dismissal given by the employer: the contract of employment should always contain the length of notice the employee is entitled to receive when his employment is being terminated. If the contract is silent, the employee is entitled to reasonable notice.102 The length of notice, however, must not be less than the statutory minimum,103 namely: (a) one week for an employee who has been continuously employed for one month or more but less than two years; (b) one week for every year of employment for an employee who has been continuously employed for two years or more but less than 12 years; (c) not less than 12  weeks for an employee who has been continuously employed for 12 years or more;

(5)

by notice of resignation given by the employee: (a) an employee may resign with or without notice. The statutory minimum period of notice is one week where the employee has been employed for one month or more104 but the contractual period of notice is frequently

98 This would almost invariably include a club employing staff. 99 Employers’ Liability (Compulsory Insurance) Act 1969. 100 Employers’ Liability (Compulsory Insurance) Regulations 1998, SI 1998/2573. 101 Williams v Watsons Luxury Coaches  Ltd [1990]  ICR  536 (illness); FC  Shepherd &  Co  Ltd v Jerrom [1986] ICR 802 (custodial prison sentence). 102 Reda v Flag Ltd [2002] UKPC 38. 103 Employment Rights Act 1996, s 12. 104 Ibid, s 86(2).

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Termination of the contract of employment 16.44 longer than this. Failure to give proper notice is a breach of contract on the employee’s part; (b) if an employee resigns on notice, it is often over some disagreement with his employer; hence it is wise to let the period of notice be worked with the employee at home rather than at work; (6)

summary dismissal by the employer: most contracts of employment give the employer an express right to dismiss an employee without notice for gross misconduct. Such contracts usually contain a list of examples of gross misconduct such as violent or abusive behaviour, dishonesty, wilful disobedience of a lawful order or persistent misconduct;

(7)

by the other party’s acceptance of a serious repudiatory breach of the contract of employment on the part of the employer or employee: (a) it is essential that the breach is accepted by the innocent party as determining the contract. Acceptance of the breach, however, will be readily inferred. Acceptance by the employee will mean in many cases that the employee can assert that he was constructively dismissed by the employer; (b) this mode of termination includes summary dismissal of the employee without notice or wages in lieu of notice, for example, serious misconduct involving wilful disobedience to a lawful order or theft of the employer’s property or drunkenness whilst on duty; (c) when an employee is sacked for whatever reason, on notice or summarily, it is always a wise practice to insist that the employee forthwith leaves the employer’s premises as the employer does not want disgruntled employees to upset the rest of the workforce. If the dismissal is on notice, it is worth paying wages in lieu of notice.

16.43 Wrongful dismissal An employee who is dismissed by his employer in breach of the contractual terms agreed between them is entitled to bring a claim for damages in the courts, where the limitation period for bringing a claim is six years from the date of dismissal,105 or in the employment tribunal, where the claim must be brought within three months (and where the tribunal does not have jurisdiction to award damages in excess of £25,000).106 This claim is quite distinct from the statutory remedy of compensation for unfair dismissal. The measure of damages for wrongful dismissal is the amount which the employee would have received had the employer complied with his contractual and statutory obligations.107 This will include loss of pay and related benefits such as the provision of a motor car. No damages will be awarded for injured feelings or distress caused by the dismissal.108 16.44 Unfair dismissal Compensation for unfair dismissal was first introduced in 1971 and is now governed by the Employment Rights Act 1996. Under this Act the employee has the right not to be unfairly dismissed. In a nutshell, the club employer who dismisses an employee without good reason or without following a fair procedure is vulnerable to a claim for unfair dismissal being brought against 105 Limitation Act 1980, s 6. 106 See the Employment Tribunals’ Extension of Jurisdiction (England and Wales) Order 1994, SI 1994/1623. 107 Laverack v Woods of Colchester [1967] 1 QB 278; cf Clark v BET plc [1997] IRLR 348. 108 Bliss v South East Thames Regional Health Authority [1987] ICR 700, CA.

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16.45  The Club’s Employment of Third Parties it in the employment tribunal.109 Generally speaking, any term in the contract of employment restricting the right to bring an unfair dismissal claim is void.110 16.45 In order to bring a claim the employee must satisfy the following preconditions: (1)

that he was employed under a contract of employment;111

(2)

that he was dismissed as defined by the Act;112

(3)

that his period of continuous employment was of sufficient length for him to bring a claim.113

16.46 Dismissal This means: (a)

the contract of employment was terminated by the employer with or without notice; or

(b) where the contract was for a fixed term, that term had expired without the contract of employment being renewed;114 or (c)

the contract was terminated by the employee with or without notice because of the employer’s conduct (ie a case of constructive dismissal).

16.47 Qualifying period This is now two years115 but subject to certain exceptions. No qualifying period is necessary, for example, where the reason or principal reason for the dismissal was a maternity-related reason;116 or was a health and safety reason;117 or was by reason of a protected disclosure;118 or was because of the employee’s assertion of a statutory right;119 or was a reason connected with the assertion of rights under the minimum wage legislation.120 In order to calculate the qualifying period one needs to know the effective date of termination of the employment. In most cases this will be the date when the employee ceases work, but where the employment is terminated by notice the effective date will be the date on which the notice expires, and where the employee is engaged under a contract for a fixed term the effective date will be the date on which the term expires.121 16.48 Reasons for dismissal Once the dismissal has been established it is for the employer to show what was the reason or principal reason for the dismissal. If there is a dispute as to the reason, the employer has the onus of proving the

109 See, for example, Warnes v Cheriton Oddfellows Social Club [1993] IRLR 58. 110 Employment Rights Act 1996, s 203(1). 111 Ibid, ss 94(1) and 230(1). 112 Ibid, s 95(1). 113 Ibid, s 108(1). 114 The Employment Relations Act 1999, s 18(1) repealed the provisions of the Employment Rights Act 1996 which had permitted agreements to exclude unfair dismissal provisions in fixed-term contracts. 115 The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012, SI 2012/989. 116 Employment Rights Act 1996, s 108(3)(b). 117 Ibid, s 108(3)(c). 118 Ibid, s 108(3)(f). 119 Ibid, s 108(3)(g). 120 Ibid, s 108(3)(gg). 121 Ibid, s 97(1).

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Termination of the contract of employment 16.50 reason.122 It is important to note that the employer cannot at the employment tribunal rely on facts which he discovered after the dismissal to justify it, although this may affect the level of compensation.123 16.49 Acceptable reasons for the dismissal are:124 (1)

capability: reasons relating to the capability or qualifications of the employee for performing work of the kind which he was employed to do. As to capability, it is essential for the employer to show what was required of the employee and that the employee was informed accordingly;

(2)

misconduct: the misconduct of the employee relied on must be sufficiently serious to warrant dismissal or, if of less serious kind, there must be repetitive misbehaviour;125

(3)

redundancy: the employee was redundant;126

(4)

illegality: the employee could not continue to work in the position which he held without contravention (on his part or the employer’s part) of a duty or restriction imposed by or under an enactment;

(5)

‘some other substantial reason’: for example, a ‘substantial reason’ could be the necessary reorganisation of the business of the club,127 or the imposition of necessary economies in running the club,128 in circumstances which do not quite satisfy the statutory definition of redundancy. In practice employment tribunals uphold dismissals for ‘some other substantial reason’ only in rare cases.

It should be noted that compulsory retirement is no longer an acceptable reason for dismissal. Although, in some circumstances, it may be possible for an employer to show that such a dismissal amounted to ‘some other substantial reason’. 16.50 Fairness of the dismissal Some reasons for dismissal are automatically deemed unfair. Generally speaking, these deeming provisions apply to employees who have been dismissed for exercising any of the primary employment rights or for carrying out any of the protected activities referred to in 16.33 ff. For example, in Masiak v City Restaurants,129 which concerned a health-and-safety dismissal, it was held that Mr Masiak’s dismissal was automatically unfair where he refused to cook food which he considered to be a hazard to public health. This was because under section 100(1)(e) of the Employment Rights Act 1996 he had been dismissed for ‘taking steps to protect other persons from danger’. It did not matter that the ‘other persons’ were his co-employees.

122 Maund v Penwith District Council [1984] ICR 143. 123 W Devis & Sons Ltd v Atkins [1977] ICR 662. This is contrary to the common law where in an action for wrongful dismissal the employer can justify the dismissal by facts subsequently discovered: Bell v Lever Bros [1932] AC 161. If an internal appeal is heard in respect of the dismissal, the employer may rely at the appeal hearing on facts subsequently discovered: West Midlands Co-operative Society Ltd v Tipton [1986] ICR 192, HL. 124 Employment Rights Act 1996, s 98(1), (2). 125 Auguste Noel Ltd v Curtis [1990] ICR 604, EAT. 126 For the topic of redundancy see 16.56. 127 See Hollister v National Farmers’ Union [1979] ICR 542. 128 See Durrant and Cheshire v Clariston Clothing Co Ltd [1974] IRLR 360. 129 [1999] IRLR 780, EAT.

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16.51  The Club’s Employment of Third Parties 16.51 If the reason for dismissal was an acceptable one, it is then for the employment tribunal to decide whether it was fair or unfair in all the circumstances (including the size and administrative resources of the employer’s undertaking).130 Neither side has any evidentiary burden in this enquiry.131 In deciding whether a dismissal is fair or unfair the tribunal must consider whether the dismissal fell within ‘the range of reasonable responses’.132 So, for example, in a capability dismissal the tribunal is likely to enquire whether the employer had available other, more suitable work for the employee or whether the employer had considered an offer to train the employee up to the required standard. A common failure is the omission to give any warnings about poor performance before the dismissal. Hence the importance of giving the employee a proper job description in the first place. In misconduct dismissals the tribunal will take into account whether the employer had adopted a fair procedure in dismissing the employee.133 The rules of natural justice operate here: the employee must be told of the alleged misconduct and be given a proper opportunity to defend the allegation or explain his behaviour, and the employer must act in good faith in dealing with the matter. Further, the employer should be satisfied that during the course of the process he has carried out a reasonable investigation of the issues raised. Furthermore, a fair procedure will normally give the employee the right to pursue an internal appeal against any decision to dismiss him. 16.52 It should be noted that the right to be accompanied to any disciplinary meeting by either a work colleague or union representative134 is a free-standing statutory right. A breach of this right does not mean that the dismissal is deemed to be automatically unfair. 16.53 Remedies for unfair dismissal This in itself is a complex area where commonly changes take place, such as the raising of the ceiling of compensation, so that the club would be well advised to take professional advice on this topic. An employee who has been unfairly dismissed can present a complaint to the employment tribunal within three months beginning with the effective date of termination or within such further period as the tribunal considers reasonable if it was not reasonably practicable to present the complaint within the three-month period.135 16.54 Where the employment tribunal upholds the complaint of unfair dismissal, it may make any of the following orders: (1)

an order for reinstatement:136 this is defined as an order that the employer shall treat the complainant in all respects as if he had not been dismissed. This order is rarely made;

130 Employment Rights Act 1996, s 98(4). 131 Foley v Post Office; HSBC Bank (formerly Midland Bank) v Madden [2000] IRLR 827. 132 See Foley’s case. 133 Lock v Connell Estate Agents [1994] IRLR 444. 134 Employment Relations Act 1999, s 10. 135 Employment Rights Act  1996, s  111(2). The time limits can be paused by the early conciliation process: see section 207B of the Employment Rights Act 1996 and the Employment Tribunals (Early Conciliation: Exemption and Rules of Procedure) Regulations 2014, SI 2014/254. 136 Employment Rights Act 1996, ss 114, 116(1).

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Termination of the contract of employment 16.55 (2)

an order for re-engagement:137 this is defined as an order that the complainant be engaged by the employer in employment comparable to that from which he was dismissed or other suitable employment. This means the employee will not get his old job back. This order is rarely made;

(3)

a basic award:138 where the tribunal makes an award of compensation it must consist of a basic award and a compensatory award.139 These two awards are the ones most commonly made. The maximum amount is currently (2020) the sum of £16,140.140 The amount of the award is based on the employee’s age, length of continuous employment and gross average wage (subject to a current (2020) maximum of £538 per week).141 The award is essentially calculated in the same way as a redundancy payment;

(4)

a compensatory award:142 the maximum amount is currently (2020) the sum of £88,519.143 The amount of the award may take into account past and future loss of earnings, loss of benefits, loss of pension rights, and loss of statutory rights.144 The employee’s duty to take reasonable steps to mitigate his loss generally determines the period for which he is awarded compensation. Thus a tribunal is unlikely to compensate the employee for any period beyond the date by which he should have found alternative employment. Furthermore, if the tribunal finds that the employee had been unfairly dismissed merely because the employer had failed to follow the proper procedure then the tribunal may discount any compensatory award to reflect the chance that the employee would still have been dismissed even if the proper procedure had been followed.145 The level of compensatory awards is so fact specific that it is not possible to give guidance on likely awards, save to say that the two most important factors are income and mitigation;

(5)

an additional award:146 an additional award of compensation is made where the order for reinstatement or re-engagement has not been complied with.

16.55 When a tribunal makes no order for reinstatement or re-engagement but instead awards compensation: (1) if the tribunal finds that the dismissal was caused or contributed to by any blameworthy conduct on the part of the employee then the tribunal will reduce the award by such proportion as it considers just and equitable having regard to that finding;147 (2) if the tribunal considers it just and equitable it has a discretion to increase any award to an employee by up to 25% if it appears to the tribunal that 137 Employment Rights Act 1996, ss 115 and 116(2). 138 Ibid, s 119. 139 Ibid, s 118(1). 140 The basic award is one week’s compensation for every year of employment (limited to a maximum of 20 years), but this rises to one-and-a-half weeks’ compensation where the employee is not below the age of 41: ibid, ss 119 and 227(1). Hence 30 weeks times £538 equals £16,410. 141 Employment Rights (Increase of Limits) Order 2020, SI 2020/250. 142 Employment Rights Act 1996, s 123(1). 143 There are certain exceptions where no maxima apply: ibid, s  124(1A), eg  dismissal by virtue of health and safety matters, whistleblowing or trade union activity. 144 A conventional figure of £350 is often awarded under this last head. 145 See Polkey v AE Dayton Services [1988] AC 344. 146 Employment Rights Act 1996, s 117. 147 Ibid, s 123(6).

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16.56  The Club’s Employment of Third Parties the employer has unreasonably failed to comply with the ACAS  Code of Practice on Disciplinary and Grievance Procedures.148 Similarly the tribunal may reduce the award by up to 25% if it appears that the employee has unreasonably failed to comply with the ACAS Code of Practice. 16.56 Redundancy The right to a redundancy payment was first introduced in 1965 and is now governed by the Employment Rights Act 1996. Subject to limited exceptions, any provision in the contract of employment excluding or limiting the right to a redundancy payment is void.149 The employer also has a duty to consult the employees’ representatives where it is proposing to dismiss as redundant at least 20 employees within a period of 90 days or less.150 A person is made redundant if the dismissal was wholly or mainly attributable to:151 (1) the fact that the employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed, alternatively to carry on such business in the place where the employee was employed; or (2) the fact that the requirements of that business for employees to carry out work of a particular kind have ceased or diminished, or are expected to cease or diminish; alternatively have so ceased or diminished in the place where the employee was employed by the employer. 16.57 In order to qualify for a redundancy payment an employee must have been continuously employed for two years before his dismissal.152 The amount of the redundancy payment is based on the employee’s age, length of continuous employment and gross average wage153 (subject to a current (2020) maximum of £538 per week).154 This means that the maximum redundancy payment is £16,410. 16.58 Certain employees are not entitled to a redundancy payment. They include: (1)

an employee who has been offered suitable alternative employment and has unreasonably refused the offer;155

(2)

an employee whom the employer is entitled to dismiss for gross misconduct.156

16.59 An employee is not entitled to a redundancy payment unless within six months of the ‘relevant date’ he has made a written claim to his employer for such a payment or he has presented a claim for unfair dismissal to the employment tribunal.157 It is important to note that where the reason for dismissal is redundancy, the employer may be liable for a claim for unfair dismissal in addition to the redundancy payment if the employer has acted unfairly towards him in dismissing him for redundancy.158

148 Trade Union and Labour Relations (Consolidation) Act 1992, s 207A, as amended. 149 Employment Rights Act 1996, s 203(1). 150 Trade Union and Labour Relations (Consolidation) Act 1992, s 188, as amended. 151 Employment Rights Act 1996, s 139(1). 152 Ibid, ss 135 and 155. 153 Ibid, ss 119 and 227(1). 154 Employment Rights (Increase of Limits) Order 2020, SI 2020/250. 155 Employment Rights Act 1996, s 141. 156 Ibid, s 140. 157 Ibid, s 164(1). 158 Ibid, ss 98(4), 105.

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Discrimination in employment 16.63

8.  Discrimination in employment 16.60 Overview One of the primary purposes of the Equality Act  2010 (‘EQA 2010’) was to codify and bring together in one Act all the anti-discrimination law. The EQA 2010 therefore replaced the Equal Pay Act 1970, the Sex Discrimination Act 1975, the Race Relations Act 1976, the Disability Discrimination Act 1995, the Employment Equality (Sexual Orientation) Regulations 2003, the Employment Equality (Religion or Belief) Regulations 2003 and the Employment Equality (Age) Regulations  2006. The provisions of the EQA  2010 as they impact generally on joining, managing and leaving a club and their effect on landlord and tenant relationships involving the club have been considered elsewhere in the book.159 Unlike these other aspects, equality in employment law is not a new concept for clubs to grasp. 16.61 The purpose of the EQA 2010 is to protect certain personal characteristics, such as race, gender, age and disability, from discrimination. The list of eight protected characteristics is set out in 4.21, to which must be added for employment purposes a ninth protected characteristic, namely, marriage and civil partnership. As to this last characteristic, it should be noted that a person has the protected characteristic of marriage or civil partnership if the person is married or is a civil partner;160 single people are not protected by the EQA 2010 against discrimination in this context. Discrimination, harassment and victimisation are defined and explained in 4.23, 4.24 and 4.25. 16.62 Part 5 (sections 39–83) of the EQA 2010, together with Schedules 6–9, deals with work and employment and may be summarised as follows: (1)

it makes it unlawful for employers to discriminate against, harass or victimise a person at work or in employment services;161

(2)

it contains provisions relating to equal pay between men and women;162

(3)

it contains provisions protecting pay increases and bonuses during pregnancy and maternity;163

(4) it makes it unlawful for an employment contract to prevent an employee disclosing his or her pay;164 (5)

it contains a power to require private sector employers to publish information relating to the gender pay gap;165

(6) it restricts the circumstances in which potential employees can be asked questions about disability or health.166 16.63 In the context of this chapter the anti-discrimination provision referred to in (1) above is the primary purpose of Part 5. This provision makes it unlawful for employers: 159 See 4.19, 5.71, 6.43, 7.41, 9.51 and 15.39. 160 Equality Act 2010, s 8(1). 161 Ibid, ss 39–40. 162 Ibid, ss 64–71. 163 Ibid, ss 72–76. 164 Ibid, s 77. 165 Ibid, s 78. 166 Ibid, s 60.

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16.64  The Club’s Employment of Third Parties (1) to discriminate against or victimise job applicants in deciding to whom to offer employment, the terms upon which employment is offered or by not offering them employment;167 (2) to discriminate against or victimise employees as to terms of employment, access (or by not affording access) to opportunities for promotion, transfer or training or for receiving any other benefit, facility or service, by dismissing them or subjecting them to any other detriment;168 (3)

to harass job applicants or employees;169

(4) to discriminate against disabled job applicants or employees by failing to comply with a duty to make reasonable adjustments.170 16.64 Employer’s vicarious liability Employers are liable for anything done by their employees in the course of their employment except where the employer can show that reasonable steps had been taken to prevent the employee from doing that thing or from doing anything of that description.171 16.65 Direct discrimination Direct discrimination occurs when an employer treats an employee less favourably than others because of a protected characteristic,172 save for pregnancy- and maternity-related discrimination where the test is whether the woman has been treated ‘unfavourably’, rather than ‘less favourably’. This reflects the fact that there is no need for a woman complaining of pregnancy or maternity discrimination to compare her treatment to that afforded to a comparator.173 However for all the other protected characteristics, a comparator is needed, and like must be compared with like, with there being no material difference between the circumstances relating to each case.174 If there is no actual comparator a hypothetical comparator may be used. There are limited exceptions to the prohibition against direct discrimination, including: (1) where the particular protected characteristic is a requirement for the work, and the person to whom it is applied does not meet the requirement or, save in the case of sex, the employer has reasonable grounds for not being satisfied that this person meets it.175 The requirement must be crucial to the post, and not merely one of several important factors. It must not be a sham or pretext and applying the requirement must be proportionate means of achieving a legitimate aim.176 For example, we consider that it would lawful for a drama club to employ a professional black actor to play the part of Othello in order to give authenticity to its production of the play, or for an art club to employ, say, a Chinese model to give its members the lawful experience of painting subjects from different ethnic backgrounds;

167 Equality Act 2010, s 39(1), (3). 168 Ibid, s 39(2), (4). 169 Ibid, s 40(1). 170 Ibid, s 39(5). 171 Ibid, s 109. 172 Ibid, s 13(1). 173 Ibid, s 18. 174 Ibid, s 23. 175 Ibid, Sch 9, para 1(a) and (c). 176 Ibid, Sch 9, para 1(b).

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Discrimination in employment 16.69 (2)

where the protected characteristic is age, in which case direct discrimination can be justified if it is a proportionate means of achieving a legitimate aim.177

16.66 Indirect discrimination This occurs when an employer applies a provision, criterion or practice which has a discriminatory effect on employees with a protected characteristic, (except for pregnancy and maternity). It can be justified if it is a proportionate means of achieving a legitimate aim.178 16.67 Harassment This occurs when an employee is subjected to unwanted conduct related to a protected characteristic which has the purpose or effect of violating his dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for him. The prohibition against harassment applies to all protected characteristics except for pregnancy and maternity, and marriage and civil partnership.179 Employees can now complain about behaviour that they find offensive even if it is not directed at them and the complainant need not possess the relevant characteristic themselves.180 16.68 Victimisation The prohibition against victimisation applies to all protected characteristics. There is no longer a need to compare treatment with that of a person who has not brought proceedings, etc under the Act.181 An employee is not protected from victimisation if they have given false evidence or information, or made a false allegation, in bad faith.182 16.69 Disability discrimination The reader is referred to 5.78, to Schedule 8 to the EQA 2010, and to the guidance on the definition of disability published by the government in May 2011.183 An important reform of the EQA 2010 specific to employment is that on recruitment it limits the making of enquiries and therefore helps to tackle the disincentive effect that an employer making such enquiries can have on a disabled applicant when applying for a job. It is not improper for an employer merely to ask a job applicant generally about his or her health, although making use of the answers may amount to disability discrimination.184 Applicants may be asked on an application form whether they have a disability which requires the employer to make adjustments to the recruitment process, for example, the applicant has a speech impairment which requires more time for interview. Or take the case of an applicant applying for a job as a general assistant in the Basset Weightlifting Club. The job requires the manual lifting and handling of heavy weights. The club’s committee in interviewing the applicant would be permitted to ask questions about his health to establish whether he was able to do the job (with reasonable adjustments for a disabled applicant, if required).185 The Committee

177 Equality Act 2010, s 13(2). 178 Ibid, s 19 and 4.23. 179 Ibid, s 26(5). 180 By virtue of ibid, s 26(1) defining harassment as ‘unwanted conduct related to a relevant protected characteristic’. 181 Because there is no requirement in ibid, s  27(1) that the detriment be less favourable treatment. 182 Ibid, s 27(3). 183 Equality Act 2010 (Guidance on the Definition of Disability) Appointed Day Order 2011, SI 2011/1159. 184 Equality Act 2010, s 60(3). 185 Ibid, s 60(6).

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16.70  The Club’s Employment of Third Parties would not be entitled to ask the applicant other health-related questions until he was offered a job.186 16.70 Remedy (protected characteristics) A person must bring a claim in the employment tribunal within three months of the alleged conduct taking place or within such other period as the employment tribunal thinks just and equitable.187 Where the conduct continues over a period of time, time starts to run at the end of that period.188 Where it consists of a failure to do something, time starts to run when the person decides not to do the thing in question.189 An employment tribunal can make a declaration regarding the rights of the complainant and/ or the respondent;190 order compensation to be paid,191 including damages for injury to feelings;192 and make appropriate recommendations.193 The measure of compensation is that which applies in tort claims, namely, compensation which puts the claimant in the same position, as far as possible, as he or she would have been in if the unlawful act had not taken place.194 Where a tribunal makes a recommendation it does not have to be aimed solely at reducing the negative impact on the individual claimant who brought the successful claim, but can be aimed at reducing that impact on the workforce as a whole.195 The recommendation must state that the employer should take specific action within a specified period of time.196 In any case where a recommendation, which is made for the benefit of the individual claimant only, is not complied with, a tribunal has the power to award compensation or increase any award already made.197 In any case of indirect discrimination where the employer proves that there was no intention to treat the claimant unfavourably, a tribunal must not award compensation unless it first considers whether to make a declaration or recommendation.198 16.71 Where the employer asks an impermissible question on recruitment and rejects the applicant, and the applicant then makes a claim to the employment tribunal for direct disability discrimination, it will be for the employer to show that it had not discriminated against the applicant.199 16.72 Equal pay Unequal pay between men and women is another form of discrimination. The EQA 2010 (and its predecessor, the Equal Pay Act 1970) covers both men and women although most complainants are women. The EQA  2010 applies to all club employees whether full-time or part-time, nor is there any qualifying period of employment before the Act applies. Replicating the 1970 Act, an employer under the EQA 2010 must pay women and men doing equal work

186 Equality Act 2010, s 60(1)(a). 187 Ibid, s 123(1). The time limits can be paused by the early conciliation process: see s 207B of the Employment Rights Act 1996 and the Employment Tribunals (Early Conciliation: Exemption and Rules of Procedure) Regulations 2014, SI 2014/254. 188 Ibid, s 123(3)(a). 189 Ibid, s 123(3)(b). 190 Ibid, s 124(2)(a). 191 Ibid, s 124(2)(b). 192 Ibid, ss 124(6) and 119(4). 193 Ibid, s 124(2)(c). 194 Ibid, s 124(6). 195 Ibid, s 124(3)(b). 196 Ibid, s 124(3). 197 Ibid, s 124(7). 198 Ibid, ss 124(4) and (5). 199 Ibid, s 60(5).

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Discrimination in employment 16.74 the same amount and give them the same contractual benefits.200 Every contract of employment is to be treated as if it contains a sex equality clause which has the effect of ensuring that pay and all other contractual terms are no worse for a person of the opposite sex where they are doing equal work.201 The sex equality clause applies to all the terms of the contract including wages and salary, nondiscretionary bonuses, holiday pay, sick pay, overtime and non-monetary terms such as a gym membership which the employee is entitled to under their contract of employment. But what happens in relation to non-contractual pay and benefits, such as a purely discretionary bonus or promotion? The answer is that an employee cannot rely upon the sex equality clause but instead has to establish discrimination based on the protected characteristic of sex. We add that if an occupational pension scheme does not include a sex equality rule, it is to be treated as including one.202 16.73 There are three kinds of equal work:203 (a) like work; (b) work rated equivalent; and (c) work of equal value. All of these require the complainant to compare themselves with a person of the opposite sex in the same employment (the comparator). There needs to be a specific comparator, not merely a hypothetical one.204 The comparator does not have to be contemporaneously employed with the applicant.205 In deciding whether the work done by the man and the woman is ‘like work’, a broad approach should be adopted. Thus in Capper Pass  Ltd v Lawton206 a cook in a directors’ dining room was held to be engaged on like work as the assistant chefs in the company’s factory canteen. A person can only claim that work is ‘rated equivalent’ if there has been a completed job evaluation study which has concluded that this is so. A  claim based on work of ‘equal value’ is likely to require the support of complex expert evidence to prove the necessary equivalence. 16.74 Defence of material factor As a general rule, if the work of an employee and a comparator of the opposite sex is equal, but their terms are not, the sex equality clause takes effect. If, however, the employer can show that the difference in terms is: (a) due to a material factor which is relevant and significant; and (b) does not directly or indirectly discriminate against the employee because of his or her sex, then a sex equality clause or rule will not apply.207 Thus in Benveniste v University of Southampton208 a woman employee was on a lower rate of pay than existing male colleagues owing to financial constraints imposed on the university. This amounted to a material factor. But once these constraints had been removed the employer had no defence to her claim for equal pay. In relation to indirect discrimination, unless the employer can show that the material factor is a proportionate means of achieving a legitimate aim it will not succeed in the material factor defence.209

200 Equality Act 2010, s 65. 201 Ibid, s 66. 202 Ibid, s 67(1). 203 Ibid, s 65. 204 Alabaster v Woolwich plc and Secretary of State for Social Security [2000] IRLR 754, EAT but the EQA 2010, s 71 now allows claims to be brought where a person can show evidence of direct sex discrimination but is unable to gain the benefit of a sex equality clause due to the absence of a comparator doing equal work. 205 Equality Act 2010, s 64(2). 206 [1977] ICR 83, EAT. 207 Equality Act 2010, s 69. 208 [1989] ICR 617. A case decided under the Equal Pay Act 1970 but still good law. 209 Equality Act 2010, s 69(1)(b).

351

16.75  The Club’s Employment of Third Parties 16.75 Pay secrecy clauses The EQA 2010 renders pay secrecy clauses in bonus schemes and employment contracts unenforceable in relation to the sharing of information between employees for the purpose of finding out whether, or to what extent, there is a connection between pay and having (or not having) a protected characteristic. Such discussions are protected acts and are subject to protection from victimisation.210 16.76 Remedy (equal pay) An employment tribunal may hear and decide claims relating to a sex equality clause or rule.211 A claim for breach of a sex equality clause or rule, or an application for a declaration about the effect of such a clause or rule, must normally be brought within six months of the end of the employment contract.212 Where the employer conceals a qualifying fact213 from the claimant, time runs from the day on which the employee discovered, or could with reasonable diligence have discovered, the qualifying fact.214 In an incapacity case the six months runs from the day on which the employee ceased to have the incapacity.215 The EQA 2010 does not prevent the civil courts from considering a contractual claim relating to a sex equality clause or rule but the court has the power to strike out such a claim if it would be more convenient for an employment tribunal to deal with it, or it may refer the question to the tribunal and stay the legal proceedings in the meantime.216 The court or tribunal can make a declaration clarifying the rights of the parties.217 The court or tribunal can also order an award by way of arrears of pay or damages.218 The standard period used for calculating the award is six years dating back from when the proceedings were instituted.219 Special provisions for calculating the award apply for claims involving concealment and/or incapacity.220

9. References 16.77 Checking references It is important that the club as the employer makes proper inquiries as to the new employee’s character and previous career, especially if the nature of the job involves the custody of or access to the members’ property. If the employee turns out to be dishonest, the failure to make these inquiries may render the club liable in negligence if the dishonesty results in the loss of the member’s property.221 16.78 Generally speaking, the employer has no obligation to give a reference to a departing employee,222 but usually does so. It is essential that the reference is 210 Equality Act 2010, s 77. 211 Ibid, s 127(1). 212 Ibid, s 129(3). 213 Defined in ibid, s 130(6). 214 Ibid, s 129(3). 215 Ibid, s 129(3). 216 Ibid, s 128. 217 Ibid, s 132((2)(a). 218 Ibid, s 132(2)(b). 219 Ibid, s 132(4). 220 Ibid, s 135. 221 Williams v Curzon Syndicate Ltd (1919) 35 TLR 475, CA (where the Ladies United Services Club was held liable for the dishonesty of its night porter who stole a member’s jewellery lodged in its custody); De Parrell v Walker (1932) 49 TLR 37. 222 The failure to give a reference may amount to victimisation: Coote v Granada Hospitality [1999] ICR 100, ECJ and Coote v Granada Hospitality (No 2) [1999] IRLR 452, EAT.

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Workers 16.82 honestly and accurately given,223 because the old employer may lay himself open to a tortious claim for negligent misstatement at the suit of the new employer if, in his desire to see the back of a troublesome employee, he paints too rosy a picture of the employee’s character and capabilities. On the other hand, if a reference is given, the employer owes a contractual duty of care to the employee to see that the reference is not misleading or negligently inaccurate because, if it is, he may be liable to the employee if the latter thereby suffers damage.224 If a reference turns out to be inaccurate, the employer will not be liable to the employee for defamation of character if it was given honestly and in the belief that the information was correct.225 A poor or inaccurate reference can also provide the basis for a claim for discrimination if it was related to a protected characteristic of the former employee or was an act of victimisation.226 It is good practice to mark the letter and the envelope in which it is sent ‘Private and confidential’. 16.79 The old employer may be asked specific questions about the employee but if a general reference is required, it should normally deal with the positions held by the employee; his length of service; his reasons for leaving; and other objective matters such as, for example, his attendance record. 16.80 Disclosure and Barring Service This is an agency sponsored by the Home Office. It enables organisations such as clubs to make safer recruitment decisions by identifying candidates who may be unsuitable for certain work, especially that which involves children and vulnerable adults. Organisations must be registered to have access to disclosure. An umbrella organisation can do this for other organisations which are not registered. Successful job applicants apply for basic, standard or enhanced checks (it is the applicant, not the employer, who applies because of the provisions of the Data Protection Act  1998). Employee applicants pay a fee, but the service is free to volunteers.

10. Workers 16.81 Some people work under contractual arrangements which do not give them the status of employees but they nevertheless qualify as ‘workers’. The concept of a ‘worker’ is recognised by legislation and is well-established. Indeed, ‘workers’ have come to play an increasingly important role in the modern labour market. 16.82 The definition of worker has two elements. First, there must be a contract under which the worker undertakes to perform work or services personally. Secondly, the other party to the contract must not be a client or customer of a business being carried on by the person undertaking the work.227

223 Bartholomew v London Borough of Hackney [1999] IRLR 246, CA. 224 Spring v Guardian Assurance  plc [1994]  ICR  596,  HL; Cox v Sun Alliance Life  Ltd [2001] EWCA Civ 649. 225 The employer will be protected by the defence of qualified privilege: Hodgson v Scarlett (1818) 1 B & Ald 232. For the topic of defamation see 13.59 and 13.65. 226 For example, Pnaiser v NHS England [2015] UKEAT/0137/15. 227 Employment Rights Act 1996, s 230.

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16.83  The Club’s Employment of Third Parties 16.83 Thus, on the one hand, the definition includes those who have agreed to work for a club personally but where there is insufficient mutuality of obligation or control by the club to attract the status of employee.228 They will qualify as a worker provided that the club is not their client or a customer. The golf professional referred to in 16.3 is an example of someone who might not qualify as an employee but might well qualify as a worker. On the other hand, the definition excludes those who have agreed to carry out work for a club personally but where the club is simply one of a number of clients or customers, for example, the performer at a club event. It also excludes those who have not agreed to carry out work for a club personally but who can delegate the work to someone else, for example cleaning contractors. 16.84 These distinctions can sometimes be difficult to draw. In Pimlico Plumbers v Smith229 a plumbing firm used a pool of plumbers, described as ‘self-employed operatives’, to service its clients. The firm exercised a significant degree of control over the pool and required them to wear branded clothing and to use branded vehicles. The plumbers were still able to work for their own clients but their ability to do so was limited. The plumbers occasionally sent another plumber to do the work allocated to them but could only do so if that other plumber was from the pool. It was held that there was a primary obligation on the plumbers to perform the work allocated to them personally and that the occasional substitution by another plumber from the pool was not inconsistent with this. The degree of autonomy given to the plumbers meant that they did not qualify as employees; however, they did qualify as workers.230 16.85 Unlike employees, workers do not have the right not to be unfairly dismissed, or the right to a redundancy payment, or indeed a number of other rights enjoyed by employees. However, some important rights are common to both workers and employees, including the right to a written statement of particulars;231 the right to the minimum wage;232 the right to paid holidays;233 the right for part time workers not to be treated less favourably;234 and the right not to be discriminated against on the grounds of protected characteristics.235

228 See 16.2 and 16.3. 229 [2018] UKSC 29. 230 See Uber BV v Aslam [2018] EWCA Civ 2748. 231 See 16.6. 232 See 16.15. 233 See 16.16. 234 See 16.11. 235 See 16.60–16.71.

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Chapter 17

The Club’s Liability for Tax and Business Rates

1. Introduction 17.1 Most club members have heard of income tax and capital gains tax. Corporation tax is another type of payment and is a direct tax which all limited companies have to pay. But this form of taxation is also payable by incorporated associations (such as community clubs) and by unincorporated members’ clubs. In a nutshell, corporation tax is a tax on profit (‘gain’) accrued through doing business (as per income tax) or by selling assets (as per capital gains tax). On the other side of the coin, clubs will be subject to tax on purchases of goods and services from third parties, such as the value added tax (‘VAT’) or on purchases of land, such as the stamp duty land tax (‘SDLT’), both of which are indirect taxes. Taxation issues are frequently made more difficult by deeming provisions in the legislation. For example, many clubs are unincorporated bodies but are treated as corporate bodies for certain tax purposes.1 Although it depends on the nature of a members’ club,2 some part of its activities is likely to involve a corporation tax liability, which will necessitate the online filing of a corporation return and payment to HM Revenue and Customs (‘HMRC’). This has two important practical implications for the committee or other body managing the affairs of the club, namely: (1)

a general awareness of the possible areas of tax liabilities; and

(2)

an understanding of the need to file returns and pay tax. Various parts of the tax legislation provide that these obligations fall on the personal responsibility of the club’s officers, with the possibility of an indemnity should the club have sufficient resources.

There is no substitute for retaining the services of a qualified accountant or tax adviser to deal with the affairs of a members’ club, even if they are not complicated. This is important in practice since the tax legislation may identify particular officers or employees of the club as being responsible for ensuring that returns are filed and tax paid.3

1 Finance Act 2003, s 100(1); Corporation Tax Act 2010, s 1121(1). 2 Eg International Gymnastics School v C&E (Lon/91/186). 3 See 5.9 (secretary’s liability) and 5.12 (treasurer’s liability).

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17.2  The Club’s Liability for Tax and Business Rates

2.  Mutual trading 17.2 Clubs as ‘companies’ are taxable on their trading profits, that is, their relevant receipts less allowable expenses.4 In all club cases (obviously so in social and recreational clubs) their basic activities will not amount to a trade, since they have no commercial purpose.5 If there is no trading, there is no corporation tax charge. Even if there is trading, it may still fall outside the scope of corporation tax under the ‘mutual trading’ principle.6 Mutual trading occurs where several persons combine together and contribute to a common fund for the financing of their venture or object and where they have no dealings or relations with an outside body. This is why, generally speaking, there is no corporation tax charge on the surplus of subscription income (over club expenses). 17.3 A members’ club is an example of mutual trading (or undertaking).7 The necessary quality of mutuality which removes a club from the category of trader must be genuine. There must also be a reasonable relationship between what members contribute and what they may expect to withdraw from the common fund. Thus, there must be a reasonable relationship between the members’ liabilities and their rights.8 The mutual trading rules do not apply to certain property activities.9 HMRC considers that the mutual trading exemption can also apply to most forms of ‘junior’ members’ subscriptions where they pay less than the full membership subscription.10

3.  Club accounts 17.4 Unincorporated members’ club The accounts prepared by unincorporated clubs and associations are not subject to the Companies Act 2006 rules and are not in the public domain. They therefore have considerable freedom in the presentation and preparation of the formal annual accounts produced for their members. However, in the interests of good governance and transparency,

4

The charge to tax does not apply to subscription income since this is not within the basic charging provisions: Carlisle and Silloth Golf Club v Smith [1913] 3 KB 75, CA, at 79; but different issues arise in relation to VAT: see 17.24. 5 See 1.1. 6 See HMRC Business Income Manual BM24200 (issued 22 November 2013, last updated 21 July 2020). 7 IRC v Eccentric Club Ltd [1924] 1 KB 390, CA. 8 Fletcher v Income Tax Commissioner [1972] AC 414, PC (where a members’ club called The Doctor’s Cave Bathing Club owned a beach in Jamaica and changed its rules to permit ‘hotel members’ to join the club; held that the relationship between the ordinary members and the hotel members was in reality a trading relationship giving rise to a tax liability). 9 Income Tax (Trading and Other Income) Act 2005, s 321. 10 See HMRC Company Tax Manual CTM40130 (issued 16 April 2016, last updated 23 July 2020).

356

Club accounts 17.7 many of the principles and accounting policies of these clubs should follow those that are normally adopted for company clubs (see 17.7 and 17.8). 17.5 Working men’s club Working men’s clubs registered under one of the Friendly Societies Acts are treated in the same way as unincorporated members’ clubs for tax purposes. However, because of their legal structure, they can automatically claim the benefit of the ‘mutual trading’ exemption. On the other hand, they cannot benefit from the tax exemptions granted to friendly societies – they are not treated as relevant friendly societies.11 17.6 Community club Community clubs registered under the Cooperative and Community Benefit Societies Act 2014 are treated as companies for the purposes of the corporation tax regime but can never be treated as ‘close companies’.12 In some respects, they are treated more favourably than unincorporated members’ clubs. All share interest or loan interest paid by a community club to a UK resident member is subject to a deduction of income tax on the member’s part (currently (2020) this is 20%).13 17.7 Company club Clubs must keep robust accounting for tax and other purposes (including evidence for the allocation of receipts and payments between different activities which have taxable implications, such as mutual trading or recovery of VAT and input tax). Company clubs (ie  those set up as limited companies) have prescribed detailed requirements as to the form and contents of their accounts under the Companies Act 2006. The directors of the club are ultimately responsible for approving and filing the accounts. The tax legislation contains specific requirements to keep and retain accounting records.14 An incorporated limited liability club would normally file its statutory accounts with the Registrar of Companies within nine months of its accounting year-end.15 The statutory accounts are available for inspection by the public, which is the price of limited liability protection. The law requires the statutory accounts to show a true and fair view.16 Furthermore, company clubs must follow the Financial Reporting Standard 102 (FRS  102).17 The areas that will apply to most clubs will include the accounting treatment and presentation of: (1)

income (revenue recognition);

(2)

property and plant and equipment and related depreciation and impairment policies;

11 Friendly Societies Act 1974, s 7(1)(a). 12 Corporation Tax Act 2010, ss 442 and 1121. 13 Income Tax (Trading and Other Income) Act 2005, s  379(1); Income Tax Act 2007, s 887(1). 14 Finance Act 1998, Sch 18, paras 21–22. 15 Companies Act 2006, s 442(2)(a). 16 Ibid, s 393. 17 Full details of FRS 102 can be found at www.frc.org.uk.

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17.8  The Club’s Liability for Tax and Business Rates (3) investments; (4)

stocks (inventories);

(5)

debtors and creditors;

(6)

hire-purchase and leasing;

(7)

statement of accounting policies.

17.8 In particular, FRS 102 (sections 5 and 6) generally requires a statement of comprehensive income (ie profit and loss account/other permitted movements on reserves) and a reconciliation of members’ funds in the balance sheet notes. Although properties are generally carried at cost in the balance sheet, FRS  102 enables a club to revalue its property (provided that revaluations are regularly carried out to ensure the reported valuation remains current). 17.9 Small company Many ‘small company’ clubs may be able to take advantage of the reduced disclosure rules when filing its accounts with the registrar of companies. Broadly, a ‘small company’ exists where it satisfies at least two of the following conditions in the relevant accounting period:18 (1)

turnover is no more than £10.2 million;

(2)

its balance sheet total does not exceed £5.1 million;

(3)

average number of employees does not exceed 50.

When it comes to filing these financial statements with the Registrar of Companies, a small company can choose to file ‘filleted’ accounts. This means that it can remove (ie ’fillet’) the directors’ report, profit and loss account and related ‘profit and loss account’ notes from the accounts. The filing of ‘filleted’ accounts’ must be approved by all the shareholders of the company.19 17.10 Micro-entity Very small company clubs may be able to take advantage of even further ‘reduced’ statutory accounts under the ‘micro-entity’ accounts rules. Such a club would normally qualify if it meets two of the following tests in the relevant accounting period: (1)

turnover is less than £632,000;

(2)

its balance sheet total does not exceed £316,000;

(3)

average number of employees does not exceed 10.

17.11 Community interest company Community interest companies (‘CIC’) may be set up as a corporate vehicle to trade with a social purpose (rather than making a profit) or provide benefit to the community.20 Their main objective is to benefit the community but within the framework and advantages of a limited company. CICs are frequently set up as companies limited by guarantee, although it is possible to form them as a traditional limited company with shares. They 18 Companies Act 2006, s 382. 19 Ibid, s 444. 20 CICs are established under the Companies (Audit, Investigations and Community Enterprise) Act 2004 and regulated by The Community Interest Company Regulations 2005, SI 2005/1788.

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Corporation tax 17.13 are more flexible than traditional ‘charity’ structures since they can issue shares, pay dividends and operate with greater commercial freedom, subject to certain important legal safeguards. CICs do not enjoy any specific tax privileges and are subject to corporation tax in the normal way.21 However, in some cases, there may be no tax liability on profits from a CIC’s activities if they do not constitute a trading activity under established principles.

4.  Corporation tax 17.12 Overview Corporation tax is charged on the profits and gains of a company.22 An unincorporated members’ club comes within the definition of ‘company’ for the purposes of the Corporation Tax Act 2009 and the Corporation Tax Act 2010.23 This means that, even though the club has no legal personality,24 the liability to tax is that of the club itself rather than the individual members who comprise the club.25 In other words, as a matter of tax law, the club has a fiscal personality. 17.13 Calculation of taxable profits The calculation of the trading profits is based on normal corporation tax principles. The tax recognition of various items, such as interest on loans and repair provisions, is largely determined by the accounting treatment. Income from sponsorship is also liable to tax; but voluntary payments to preserve the club may not be taxable.26 Depreciation charged in the accounts is never an allowable expense for corporation tax purposes. However, capital allowances might be claimable on qualifying plant and machinery etc used for non-mutual activities and a structures and buildings allowance claim may also be beneficial. An apportionment of the relevant capital expenditure may be required to determine the ‘non-mutual’ element).27 The allocation of income and expenditure between members and non-members can give rise to practical accounting difficulties when preparing the corporation tax computations. However, in practice, HMRC will generally accept any reasonable and fair apportionment of direct costs and overheads. This would normally include the wages and salaries of employees of the club.

21 See Section 4. 22 Taxable profits on business transactions and chargeable capital gains are all now computed as corporation tax: see eg Corporation Tax Act 2010, s 1071(5). 23 Corporation Tax Act 2010, s  1121(1); but see Conservative and Unionist Central Office v Burrell [1982] 1  WLR  522, CA (where the Conservative Party was held to be a political movement rather than an unincorporated association). 24 See 1.9. 25 Worthing Rugby Football Club Trustees v IRC [1985] 1 WLR 409 (liability of unincorporated members’ club for corporation tax and development land tax). 26 HMRC Business Income Manual 41810 (issued 22 November 2013, last updated 21 July 2020). 27 Capital Allowances Act 2001.

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17.14  The Club’s Liability for Tax and Business Rates

Example 1 Basset Park Athletics Club summarised income and expenses for the year ended 31 March 2020 is as follows: £ Membership fees

9,400

Race events – Members

14,700

– Non-Members

18,600

Total income

42,700

Operating costs Net income surplus

(15,200) 27,500

In previous years, HMRC has accepted that the operating costs can be apportioned by reference to the split between mutual income (membership fees and members’ race events income) and ‘non-mutual’ income (non-members’ race events income). The membership fees and the members’ race events income is exempt under ‘mutual trading’ principles. The corporation tax computation for the year ended 31 March 2020 is as follows: £ Non-members fees

18,600

Less: Operating costs attributable to non-members income £15,200 × £18,600/£42,700

(6,621)

Taxable trading profit

11,979

Corporation tax @ 19%

£2,276

17.14 Mutuality There can still be mutuality where the members’ club carries on its business through the structure of a company provided that the identity of the club members is the same as the company membership.28 HMRC will normally treat a company club (ie a company limited by shares or by guarantee) as a members club by HMRC if:29 (1)

the members of the club and the shareholders of the company are intended to be identical bodies;30

28 IRC v Eccentric Club Ltd [1924] 1 KB 390, CA; Fletcher’s case; Westbourne Supporters v Brennan [1995] STC (SCD) 137. 29 See HMRC  Business Income Manual 24255 (issued 22  November 2013, last updated 23 July 2020). 30 Fluctuations due to death, resignation and expulsion are generally ignored.

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Corporation tax 17.16 (2)

there is only one class of share;

(3)

no dividend is payable to its members.

Any surplus that is returned to members from its mutual trading activities would not be treated as a taxable distribution in the members’ hands.31 17.15 Non-mutual trading In general, members’ clubs will be liable to corporation tax on non-mutual trading activities such as those with non-members; on interest received from investments or deposits of money such as bank accounts; and on rents and so on. A club would also be subject to corporation tax on any capital gains realised on the disposal of most capital assets, typically property.32 The calculation of capital gains and losses is based on general CGT principles of tax law. Many useful reliefs are available. One of the most important is business asset roll-over relief. This relief can be used where a club sells an asset (for example, club property) and reinvests the sale proceeds in buying an eligible ‘replacement’ asset. The replacement asset must be acquired within one year before or three years after the disposal of the ‘original’ asset.33 Clubs may also fall within the scope of specific tax anti-avoidance rules. 17.16 Income from non-members A corporation tax charge is likely to arise on ‘profits’ generated from goods and services supplied to non-members.34 This would include commercial charges/fees made by clubs to allow visitors or ‘temporary’ members to use their facilities. Such charges would often be levied to cover the relevant direct costs and overheads of the club. These commercial charges/fees would fall to be treated as trading receipts. Under these principles, where members pay a separate charge to use the clubs’ premises or facilities for personal events (for example, private party), this would be taxed (subject to a deduction for reasonable expenses) as ‘non-mutual’ income. The reasoning here is that the income is being derived from members in their personal capacity rather than in their capacity as club members. This is partly evidenced by the nature of the function and partly by the fact that some guests may not be guests of the club member.35

31 Corporation Tax Act 2010, s 1070; Jones v South-West Lancashire Coal Owners Association [1927] AC 827. 32 See HMRC Company Tax Manual CTM 40105 (last updated 20 October 2020). 33 Taxation of Chargeable Gains Act 1992, ss  152–158 – in this context see in particular s 158(1) which treats unincorporated associations etc as qualifying for roll-over relief. 34 Carlisle and Silloth Golf Club v Smith [1913] 3 KB 75, CA (where the club was assessable for income tax in respect of visitors’ green fees); Carnoustie Golf Course v IRC 1929 SC 419. 35 As to guests: see HMRC  Business Income Manual 24360 (issued 22  November 2013, last updated 21  July 2020). Where there are mixed receipts from members and guests and where there are non-exclusive areas ie  parts of the club premises not restricted to members: see HMRC  Business Income Manual 24455 (issued 22  November 2013, last updated 21 July 2020).

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17.17  The Club’s Liability for Tax and Business Rates Corporation tax is not payable on commissions paid to the club for permission to install vending or fruit machines on the club premises.36 There is also a possible exclusion from the tax charge for receipts where the services are not operated on a commercial basis or are provided to members at a lower price than that charged to non-members.37 Practical difficulties can arise in identifying the split between mutual and ‘nonmutual’ income, as illustrated below.

Example 2 Peter Davey and Jenny are married and are both members of the local Basset Tennis Club. Peter brings his friend, Daniel Whiddon, to watch the games. After the tennis, they use the club bar and Daniel is signed in as a personal guest of Peter. They all have a few drinks and a bar meal. As Daniel is a personal guest of the members, the entire bill – including Daniel’s share – is mutual trading and therefore not taxable. On the other hand, if Daniel had paid for his own drinks and meal, that element would be taxable as non-mutual trading.

17.17 Corporation tax compliance Where clubs or unincorporated associations receive taxable income, such as profits from non-mutual trading, investment income, they must comply with various corporation tax compliance obligations. They must prepare and file their corporation tax return (form CT  600) online with HMRC. Under the corporation tax self-assessment regime (CTSA), the return is submitted online. However, in contrast to almost all companies, clubs and unincorporated associations may simply attach their accounts in PDF format, and they do not necessarily have to attach the accounts in iXBRL format.38 The CT600 corporation tax return must be filed online within 12 months of the end of a club’s accounting period.39 There are penalties for late filing – £100 if the return is up to three months late, increasing by a further £100 if it is more than three months late. A more severe penalty applies if the return is more than six months late – HMRC will levy a penalty of 10% of the estimated corporation tax liability.40 There are penalties for failing to deliver a return, but in the case of smaller clubs HMRC tends to operate a ‘soft-touch’ approach.41 36 See HMRC  Business Income Manual 24315 (issued 22  November 2013, last updated 21 July 2020). 37 See Revenue Interpretation RI 177. 38 HMRC Company Tax Manual COM60040 (issued 16 April 2016, last updated 23 July 2020). 39 The filing date can be extended in certain special cases: see Finance Act 1998, Sch  18, para 14. 40 Finance Act 1998, Sch 18, paras 17 and 18. 41 HMRC Company Tax Manual COM100020 (issued 16 April 2016, last updated 23 July 2020).

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A miscellany of clubs 17.18 In the vast majority of cases, clubs and other unincorporated associations must pay their corporation tax liability within nine months of the end of the relevant accounting period.42 By ‘concession’, clubs can be removed from the CTSA filing obligation where they anticipate their annual corporation tax liability to fall below £100.43 This is an important relaxation for members’ clubs that have a small amount of annual bank interest income. Such clubs can then be treated as ‘dormant’ for five years (in the absence of any material future changes affecting its tax position).

5.  A miscellany of clubs 17.18 Charitable clubs The Charities Act 2011 introduced the charitable incorporated organisation (‘CIO’) and this now includes the Association CIO, which comes within the sphere of this book. Charities do not enjoy a blanket exemption from income tax, capital gains tax (‘CGT’) or corporation tax. The corporation tax exemptions for charitable bodies are contained in Part 11 of the Corporation Tax Act 2010.44 To avoid abuse HMRC has tightened up its rules and requires charities claiming the relevant tax exemptions to be run by fit and proper persons.45 Historically, charities existed to provide funds for deserving causes over an indefinite period of time. That historic reason is now coupled with tax advantages so that the charity is better placed financially to carry out its activities. In summary they are as follows: (1)

companies and individuals can make tax-deductible donations to charities;46

(2)

tax repayment under the Gift Aid scheme;

(3)

exemption from corporation taxation on: (a) profits from ‘charitable’ trade, (b) profits from fund-raising events, (c) profits from lotteries, (d) property income, (e) investment income, (f) certain miscellaneous income, provided in all cases the profit or income is applied to charitable purposes only;

42 Taxes Management Act 1970, s 59D. 43 HMRC  Company Tax Manual COM23110 (issued 16  April 2016, last updated 23  July 2020). 44 Corporation Tax Act 2010, ss 466–517. 45 Finance Act 2010, Sch 6. 46 See Corporation Tax Act 2010, Part 6, Chapter  1 entitled ‘Charitable Donation Relief’ (ss 189–217); and Income Tax Act 2007, Pt 8, Ch 2 entitled ‘Gift Aid’ (ss 413–430) which concerns tax relief on gifts of money made to charities by individuals. Tax relief is sometimes made by HMRC concession.

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17.19  The Club’s Liability for Tax and Business Rates (4) entitlement to a mandatory 80% relief from business rates: local authorities are able to grant 20% discretionary relief;47 (5)

entitlement to certain VAT advantages.48

The ‘trading profits’ exemption is restricted since it is only available where the profits arise in carrying out the primary purpose of the charity or where the activity is mainly carried out by the beneficiaries of the charity. Charities that carry out commercial trading activities (for example, ‘charity shops’) will normally set up through a trading subsidiary company which donates its taxable profits to the charity (making use of the corporate charitable donations relief).49 17.19 Community amateur sports club The tax concept of a community amateur sports club (‘CASC’) was introduced in 2002 to provide financial support, through tax reliefs, to amateur clubs that encourage participation in sport and which would otherwise struggle to survive.  A CASC must meet certain qualifying conditions. Broadly, it must be open to the whole community, be organised on an amateur basis, and must not exceed the ‘income limit’. Its main purpose must be providing facilities for and the promotion of one or more sports.50 While CASCs come under the general law, they generally require less regulation than if a sports club had registered as a charity. CASCs are effectively treated as a ‘charity’ for many tax purposes (see 17.18).51 Donations and gifts to a CASC qualify for corporation tax relief. Gifts and donations made by individuals to CASCs are exempt from inheritance tax.52 Clubs that are registered as CASCs are able to claim the following tax reliefs: (1)

tax repayment under the Gift Aid scheme;

(2)

exemption from corporation tax on:53 (a) UK trading income where such income does not exceed £50,000 in any 12 month accounting period; (b) UK property income where such income does not exceed £30,000 in any 12 month accounting period; (c) interest income and Gift Aid income; and (d) chargeable gains, provided that in each case the income is used for providing facilities for and promoting participation in one or more eligible sports;54

47 See 17.52 and 17.53. 48 See 17.33 and 17.40. 49 See www.gov.uk/guidance/charities-and-trading for details about using a trading subsidiary. 50 Corporation Tax Act 2010, ss 658–671. 51 See 1.63. 52 Inheritance Tax Act 1984, s 23. 53 Corporation Tax Act 2010, ss 662–665. 54 Ibid, s 661(3).

364

Other tax items 17.21 (3)

entitlement to 80% exemption from business rates;55

(4)

entitlement to certain VAT advantages.56

A separate special relief enables companies to obtain tax relief on contributions to grassroots sports through recognised sport governing bodies, and deductions of up to £2,500 in total annually for direct contributions to grassroots sports.57 17.20 Proprietary clubs These clubs are invariably run on commercial lines and the proprietor of the club, whether a company or an individual, will be subject to the usual incidence of taxation in respect of net profits made in running the club.

6.  Other tax items 17.21 Tax relief on club subscriptions The general rule is that directors and employees can only deduct expenses against their employment income (and benefits) provided they have been incurred wholly, exclusively, and necessarily in the course of their employment.58 Thus in Brown v Bullock59 the bank manager of the Pall Mall branch of the Midland Bank followed the footsteps of his predecessors and joined the Devonshire Club in St James. This was done at the insistence of his employers to foster local contacts and his business relationships with the bank’s customers. The Court of Appeal held that in order to be deductible the test was whether the duties of the office or employment necessitated the incurring of the particular outlay, irrespective of what the employer had prescribed. Consequently, it was held that the club subscription was not a deductible expense.60 This decision can be contrasted with the one reached in Elwood v Utitz.61 This involved the managing director of a Northern Ireland company, who was required to go to London from time to time. He therefore joined two London clubs solely for the purpose of overnight accommodation and using their business facilities instead of staying at a suitable hotel which was a more expensive option. On this basis, the Court of Appeal, determined that club subscriptions should be a deductible expense. The test for self-employed workers gives more leeway as it is not necessary to prove that the subscription is necessarily incurred – the expense simply has to be wholly and exclusively incurred.62 Subscriptions to HMRC-approved professional bodies are tax allowable.63

55 See 17.52–17.54. 56 See 17.33–17.36. 57 Corporation Tax Act 2010, ss 217A–217D. 58 Income Tax (Earnings and Pensions) Act 2003, s 336. 59 [1961] 1 WLR 1095, CA; see also Emms v HMRC [2008] STC (SCD) 618. 60 Harman LJ found some of the arguments of the Crown so distasteful that he declined to give a judgment but agreed in dismissing the taxpayer’s appeal. 61 [1966] 42 TC 482. 62 Income Tax (Trading and Other Income) Act 2005, s 34. 63 Details are available on the gov.uk website.

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17.22  The Club’s Liability for Tax and Business Rates 17.22 Tax implications on incorporating an unincorporated club Although each situation will depend on the precise facts of each case, the incorporation of an existing unincorporated club will generally involve the transfer of its assets (which might include property) to the company. While this would normally give rise to a capital gain for the disposing club, it will frequently be possible to do this on a ‘tax-neutral’ basis under the special tax reconstruction rules.64 This would involve the transfer of the assets to the (new) company. In return, the members give up their membership rights in the old club in exchange for admission as members/shareholder of the company. This should not involve any distribution to the members for income tax purposes. Specialist tax advice will often be required and the appropriate tax clearances should be obtained from HMRC.65 17.23 The transfer of any business element should not give rise to VAT on the ‘consideration’ given since the transfer of going concern rules should apply for VAT purposes. The stamp duty land tax (‘SDLT’) treatment of any properties being transferred should also be determined.66 It may be possible for a property to be retained outside the company, and held on trust for the benefit of the individual members.

7.  Value Added Tax 17.24 Clubs and VAT VAT is generally imposed at 20% on the purchase of many goods and services by a club and upon certain receipts by the club in respect of its activities. The principal Act is the Value Added Tax Act 1994 (as amended). This form of taxation is simple in concept but complex in application.67 And, due to its highly prescriptive nature, the application of VAT can give rise to a number of problems for clubs. There is no concept of mutual trading for clubs.68 Consequently, the supply of goods or services by a members’ club to its own members may be subject to VAT even if the profits generated by it are not subject to corporation tax under the mutual trading principle.69 Complex rules apply to the subscriptions of members.70 Clubs are deemed to carry on a business for VAT purposes71 and are therefore generally subject to all aspects of the VAT regime. 17.25 Basic VAT principles and making tax digital The basic principle is that VAT must be added at the standard rate (currently (2020) 20%) to the

64 Taxation of Chargeable Gains Act 1992, ss 135–139. 65 This will normally involve applying for advance tax clearances under Taxation of Chargeable Gains Act 1992, ss 139(5) and 138 (for shareholder reconstruction relief in s 136). 66 See 17.41. 67 The Act is supplemented by numerous regulations. 68 Carlton Lodge Club v Custom and Excise Commissioners [1975] 1 WLR 66. 69 Ibid. But see Customs & Excise Commissioners v Professional Footballers’ Association (Enterprises) Ltd [1993] 1 WLR 153, HL (where it was held that no separate output tax was payable on the cost of trophies presented at a dinner where the dinner tickets included VAT, since the price of the ticket included the provision of trophies). 70 See 17.34. 71 Value Added Tax Act 1994, s 94(2).

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Value Added Tax 17.26 sale price of its goods and services at the time of the supply (the ‘output tax’).72 However, some items are zero-rated (0%), levied at a reduced VAT rate (5%), or are exempt (see 17.31). It is essential to ensure that VAT is properly dealt with since the price received is treated as including the relevant VAT even where it is not expressly charged.73 VAT would typically be charged to the club on the rent of its premises and on the purchase of goods for onward sale to the members. Clubs may also have to charge VAT on the supplies it makes to its members or third parties. The supplier/seller is legally required to provide a VAT invoice,74 which must specify certain details.75 Clubs which are compulsorily VAT registered must invariably comply with HMRC’s requirements for making this tax digital.76 Broadly speaking, this means clubs that must use software that links its accounting records to the VAT return or use some form of ‘bridging’ software that takes VAT information from spreadsheets directly (electronically) to the VAT return. 17.26 VAT compliance and administration The VAT registration is made in the name of the club, association or organisation and is not affected by any change in its members.77 Each club or association receives a unique VAT number. Constitutional arrangements may be important here. For example, if the Basset Town Sports Club operates three separate sections – cricket, hockey and tennis – these may be counted as separate entities if each section is managed by its own Committee and operates its own bank account. This will be the case if each section is wholly or substantially financially independent of the others. Anything required to be done for VAT purposes is the joint and several liability of every member holding office as president, chairman, treasurer, secretary or any similar officer of the club.78 In default, the persons liable will be every member holding office as a member of a committee.79 In default of this last provision, every member of the club will be liable.80 Accounting and supporting records must be kept for six years.81 These include retaining tax invoices to support input tax claims. The rules for computation and recordkeeping are modified for ‘retailers’ and predominantly cash businesses.82

72 Value Added Tax Act 1994, s 4(1); Hostgilt Ltd v Megahart Ltd [1999] STC 141. 73 Ibid, s  19. See, eg  Hostgilt  Ltd v Megahart  Ltd [1999]  STC  141; Wynn Realisations  Ltd v Vogue Holdings  Inc [1999]  STC  524; Higher Education Statistics v Customs and Excise [2000]  STC  332; Basildon Rugby Union Football Club v Customs and Excise Commissioners [1988] VTD 3239. 74 The Value Added Tax Regulations 1995, SI 1995/2518, reg 13. 75 Ibid, reg 14. 76 See VAT Notice 700/22: Making Tax Digital For VAT. 77 Value Added Tax Act 1994, s 46. 78 Value Added Tax Regulations 1995, regs 7 and 10. 79 Note that this says a committee, not the committee. 80 This is an astonishingly draconian default measure, bearing in mind that the member’s liability is normally limited to his entrance fee and his subscriptions (Wise v Perpetual Trustee Co [1903] AC 139) but, we surmise, it is unlikely to be invoked in practice. 81 Value Added Tax Act 1994, Sch 11, para 6(1), (3). 82 Ibid, Sch 11.

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17.27  The Club’s Liability for Tax and Business Rates 17.27 Compulsory registration Clubs, associations or organisations that provide facilities to members for a subscription or other consideration are deemed to be carrying on a business for VAT purposes.83 A club must register with HMRC for VAT purposes once its taxable supplies of goods or services to its members and/or third parties in the past 12 months exceed the VAT registration threshold (currently £85,000 (2020)).84 Once registered, HMRC may cancel the registration where a club ceases to make taxable supplies or the value of its supplies does not exceed the currently deregistration threshold of £83,000 (2020) in the past 12 months.85 17.28 Voluntary registration A non-VAT registered club cannot recover the VAT charged on its rent or its purchases of goods and services. In such cases, even though its taxable supplies are below the VAT registration threshold, it may still choose to register for VAT voluntarily. HMRC has a duty to register clubs if they make a voluntary request to be registered and satisfy certain conditions.86 Voluntary VAT registration is likely to be beneficial where a club’s ongoing input tax exceeds its output tax. In other words, the club supplies taxable goods/services of a relatively small value but purchases taxable goods/services etc of a greater value. In certain cases, the nature of a club’s supplies to members and third parties may be exempt. This may restrict the recovery of input tax, although in many cases full input tax recovery may be possible under the partial exemption de minimis rules.87 17.29 VAT computation The VAT on sales and on purchases etc is recognised for VAT purposes at the date of the relevant tax point. Consequently, it is accounted for in the VAT return period that includes the relevant tax point for the sale or purchase etc. There are detailed rules for identifying the tax point. In the vast majority of cases, this will be the date of the relevant invoice.88 Special rules may apply where cash is paid or there are special schemes (see 17.30).89 VAT returns are made online, normally on a ‘quarterly’ basis, to account for the relevant VAT. A club will be required to pay over VAT (usually by direct debit) to the extent that the VAT on its sales (‘output tax’) exceeds the VAT it has incurred on the goods and services it has purchased (‘input tax’).90

83 Value Added Tax Act 1994, s 94(2)(a). A purely voluntarily body is not carrying on business for VAT purposes: Greater London Red Cross Blood Transfusion Services v Customs and Excise Commissioners [1983] VATTR 241 but the mere fact that the activity is a public service is not inconsistent with the carrying on of a business. This still applies if the voluntary body requires reimbursement of expenses, as did the blood donor service. The Value Added Tax Act 1994, Sch 9 sets out the list of exempt supplies and of goods and services. 84 Value Added Tax Act 1994, Sch 1, para 1(1). 85 For deregistration, see ibid, Sch 1, paras 3, 4 and 13. 86 Ibid, Sch 1, para 9. 87 Ibid, s 24; Value Added Tax Regulations 1995, SI 1995/2518, Part XIV, particularly reg 106. 88 Value Added Tax Act 1994, ss 30 and 83. 89 VAT Notice 727 – Retail schemes. 90 Value Added Tax Regulations 1995, reg 32.

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Value Added Tax 17.29 On the other hand, if its input tax on purchases exceeds the output tax on sales for a quarter, it is entitled to a VAT repayment. The sale of exempt items can deny or restrict the recovery of input tax (see 17.32). VAT returns must be filed online within one month and seven days after the end of each quarterly return period. The VAT payment is frequently collected by direct debit. In such cases, HMRC may grant an additional period to pay the VAT – which is within one month and ten days after the end of the return period. For other methods of payment, the VAT payment must be ‘cleared’ with HMRC within one month and seven days after the end of the return period. Failure to submit the return on time may lead to penalties.91

Example 3 Harry Hawke is the treasurer of the Basset Amateur Dramatics Society. He prepares his VAT returns on spreadsheets and uses bridging software to populate the relevant entries on the VAT return. His VAT return spreadsheet for the quarter ended 31 December 2019 showed the following summary: £

Output VAT 20%

Input VAT 20%

Income Membership subscriptions

14,020

2,804

Bar sales and meals

9,580

1,916

Hire of hall (Yoga Club)

2,000

400

25,600

5,120

15,000

–

Total income Expenses Wages Bar purchases

6,200

1,240

Running expenses – VAT

4,800

960

Running expenses – Zero-rate

500

–

Running expenses – no VAT

960

–

27,460

2,200

Total expenses

The club will have to pay VAT of £2,920 (Output VAT of £5,120 less Input VAT of £2,200) to HMRC for the quarter ended 31 December 2019.

91 See VAT Notice 700 – section 21.

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17.30  The Club’s Liability for Tax and Business Rates 17.30 Special VAT schemes Clubs etc. with annual taxable supplies of less than £1.35 million can ease their VAT administration by applying for the annual VAT accounting scheme. This means that they only need to submit one annual VAT return. However, payments on account must be made during the year with a settling up of a ‘balancing’ VAT payment or refund when the annual return is submitted. Clubs and organisations with an annual taxable turnover below £1.35 million can also opt to account for VAT under the cash accounting scheme. Under the scheme, the relevant VAT is only accounted for when payment is received from a customer or paid over to a supplier etc.92 Smaller clubs etc may wish to take advantage of the flat rate scheme. This is available where their ‘taxable’ turnover does not exceed £150,000 a year, excluding VAT. The flat rate scheme considerably simplifies VAT accounting. Under the scheme, the VAT liability for each quarter is simply calculated as a specified percentage of the VAT inclusive turnover (the relevant percentage varies according to each relevant business sector). This dispenses with the need to track input tax on each individual sale and purchase.93 17.31 Comparison between taxable and exempt supplies VAT charged at the standard rate, reduced rate or zero-rate are often referred to as ‘taxable supplies’. Under zero-rating, the sale is subject to VAT at 0% but since this is a taxable supply, the relevant input tax can be reclaimed, which may entitle the club to a refund. On the other hand, invoices for exempt sales (supplies) state that they are VAT exempt – thus, no VAT is charged. However, input tax relating to exempt supplies is not recoverable (subject to the partial exemption and de minimis rules (see 17.32)). The main VAT principle for VAT is that all supplies are standard rated unless they are specifically treated as a zero-rated, reduced rate or exempt supply. There is no ‘blanket’ VAT exemption or ‘zero-rating’ for supplies made by public bodies or organisations for charitable or welfare purposes. It is necessary to search for a specific exemption or zero-rating provision in the VAT legislation for the relevant supply or activity.94 (1)

Zero-rated supplies Schedule  8 to the Value Added Tax Act 1994 sets out the zero-rated supplies of goods and services. The schedule is divided into groups. The groups that are likely to be of most interest to clubs are: books; caravans and houseboats; charities; clothing and footwear; construction of buildings; drugs, medicines and aids for the disabled; food (which includes drink but excludes snack foods, and excludes drink charged with excise duty); protected buildings; sewerage services and water; talking books for the blind and disabled and wireless sets for the blind; and transport.

92 VAT Notice 731 – Cash accounting scheme. 93 VAT Notice 733 – Flat rate scheme. 94 A useful short summary of exempt and zero-rated supplies is provided in section 29 of the useful VAT Guide (VAT Notice 700).

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Value Added Tax 17.32 (2)

Exempt supplies Schedule  9 to the Value Added Tax Act 1994 sets out the categories of exempt supplies. The groups that are likely to be of interest to clubs are: betting, gaming and lotteries; education; fund-raising events by charities and other qualifying bodies; health and welfare; insurance; the grant of any interest or right over land (there are many exceptions in this group such as the letting of rooms); postal services; and sports, sports competitions and physical education.

The vast majority of clubs and organisations are unlikely to be affected by the reduced rate of VAT.95 However, as a temporary measure during the coronavirus pandemic, the provision of food and drink in cafes, bars and restaurants is subject to a lower VAT rate of 5% (until 12 January 2021). Similarly, the reduced 5% VAT rate applies to holiday accommodation and admissions to certain attractions. Certain supplies may be outside the scope of VAT altogether, such as genuine donations and grants.96 Recoverable input tax might be restricted where it is related to non-business ‘outside the scope’ of VAT income.97 Supplies in relation to land (such as renting of property) are generally exempt for VAT purposes. However, the ‘land owner’ may ‘waive’ the VAT exemption by exercising the option to tax. This would mean that supplies relating to the land would generally become standard rated.98 Options to tax are likely to increase the land owner’s input tax recovery. Provided that the recipient of the supply is VAT registered they would normally be able to recover the relevant VAT charged to them and therefore should not be disadvantaged. 17.32 Partial exemption A  VAT registered club or organisation is partially exempt where not all its supplies are ‘taxable’ for VAT purposes. Such clubs/ organisations would supply goods and services that are standard-rated/reducedrated/zero-rated (usually referred to as ‘taxable supplies’) and exempt from VAT (where no output tax is charged). Input tax relating to the making of exempt supplies is not reclaimable whereas input tax relating to taxable supplies is fully reclaimable. If a business is partially exempt, it may therefore suffer a restriction in the input tax that it is able to recover, which is an added cost to the club. Calculating the amount of recoverable input tax can be made in a number of different ways.99 The default standard apportionment is simply based on the relative turnover amounts. This requires the club/business to break down its input tax into three main categories:

95 Value Added Tax Act 1994, Sch 7A. 96 See HMRC VAT Supply and Consideration Manual VATSC06000 for detailed issues on grant income. 97 See Value Added Tax Act 1994, s 24. 98 Value Added Tax Act 1994, Sch 10, as amended. 99 See VAT Notice 706 (Partial exemption) for further details.

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17.32  The Club’s Liability for Tax and Business Rates (1)

100% exempt input tax: input VAT directly relating to the making of wholly exempt supplies;

(2)

100% fully taxable input tax: input VAT directly relating to the making of wholly taxable (standard/reduced/zero-rated) supplies;

(3)

residual input tax: input VAT (typically on overhead costs) that relate to the making of both taxable and exempt supplies.

Due to its distortive effect, VAT incurred on capital expenditure is normally excluded from these calculations. The VAT recovery position is as follows: (a)

the VAT entirely attributable to exempt supplies in (1) cannot be recovered;

(b) VAT wholly relating to the making of ‘taxable’ supplies in (2) is fully recoverable; (c)

residual input tax (ie input VAT in (3) is apportioned by reference to turnover/ sales. Thus, the recoverable percentage of residual input tax is calculated as follows: £ Residual input tax ×

Taxable sales Total sales

× 100

The total VAT recoverable is the directly attributable tax relating to taxable supplies and the percentage of residual (overhead) VAT relating to taxable supplies. Where both taxable and exempt supplies are made, clubs and organisations may also be able to use other ‘special’ methods to calculate the amount of recoverable VAT. Provided they are reasonable, they may improve the VAT recovery position. It is necessary to obtain HMRC’s advance approval to use a special method.100 Importantly, in many cases, clubs etc may be able recover the exempt input tax under the partial exemption de minimis rules.101 Two de minimis conditions must be met: (i)

input VAT relating to exempt supplies does not exceed £1,875 for the relevant quarter (£625 for a monthly return and £7,500 for an annual calculation); and 

(ii)

this exempt input VAT attributed does not exceed 50% of the total input VAT incurred in the relevant quarter.

Effectively this allows up to £7,500 worth of ‘exempt’-related input VAT to be reclaimed each year. The exempt input tax de minimis limits are applied to each quarterly VAT return. At the end of the club’s VAT year, the relevant VAT figures are then recalculated under

100 See section 6 of VAT Notice 706. 101 See section 11 of VAT Notice 706.

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Value Added Tax 17.33 the ‘annual adjustment’ process, with an appropriate additional VAT payment/ refund being made. Input tax recovery will be particularly important where a club is embarking on substantial capital expenditure, such as an extension to the clubhouse, where input tax will be payable on many goods and services in connection with the project. The design of the building and its intended use may be crucial to the VAT input tax recovery. Careful structuring of the project, for example, the allocation of certain parts of the premises to separate (VAT) ‘taxable’ use, such as separate members’ and visitors’ dressing rooms, may increase the input tax recovery on the building works. Similarly, the VAT reclaimable on future repairs and rents may be improved.

Example 4 Jan Stewer is the secretary of the Basset Musical and Arts Society and is preparing the club’s annual ‘partial exemption’ adjustment calculation for the year ended 31 March 2020 The relevant figures are as follows: Outputs

£

VAT taxable income

48,700

VAT exempt income (fund-raising and members’ subscriptions)

26,500

Total output tax

75,200

Inputs

£

Wholly relating to taxable supplies

17,200

Wholly relating to exempt supplies

8,300

Residual input tax

34,950

Total input tax expenses

60,450

The residual input tax relating to ‘taxable’ supplies is £22,634 (being £34,950 × 48,700/75,200). The total exempt input tax for the year is therefore £20,616 (being direct exempt input tax £8,300 and £12,316 (£34,950 less ‘taxable’ part £22,634) of ‘exempt’ residual input tax. The total exempt input tax of £20,616 exceeds the annual limit of £7,500 and does not fall within the de minimis rules. This input tax cannot be recovered by the club and an adjustment may be required to the cumulative VAT position in the last four quarters’ VAT returns.

17.33 Value added tax on subscriptions The VAT subscriptions can be a difficult area: 373

17.33  The Club’s Liability for Tax and Business Rates (1) club subscriptions paid in return for services and facilities etc provided to members are often chargeable to VAT at the standard rate (currently 20% (2020));102 (2)

as a general rule, subscriptions are treated as a single supply for VAT purposes. The VAT treatment is based on the nature of the ‘principal benefit’ principle ie there is one main benefit within a package of benefits, with all the other benefits being supplementary or incidental to the main one. For example, in the case of a film club, the main benefit may be the right to film admission (standard-rated), but there may also be other benefits such as a film magazine (which is zero rated). In this case, the subscription to the club would be treated as a supply of film admission – this would be standardrated for VAT or possibly exempt if the cultural activities exemption applied (see 17.35). On the other hand, a charity or club may opt to break down its membership package into a number of separate supplies for VAT under the ‘multiple supply’ rule.103 The consideration for the supply would be apportioned, with the relevant VAT treatment being applied to each element. Thus, for example, this would enable the film club to treat the supply of the magazine as zero-rated. In Commissioners of Customs and Excise v The Automobile Association104 the member’s annual subscription to the AA contained a package of benefits, such as a free handbook, a free magazine, and free legal advice. It was held that the AA subscription should be split as a multiple supply for VAT purposes. Therefore, the AA Handbook and its magazine would be zero-rated and its legal advice service would be taxable at the standard rate. In Trewby v Customs and Excise Commissioners105 the court held that the subscription to a country club did not include any share of an interest in the club’s land, which would have been an exempt supply;

(3) subscriptions made to certain non-profit-making public interest bodies may be exempt from VAT.106 However, VAT exempt treatment only applies to services that relate to the aims of the organisation and do not, for example, include admission fees for events etc for which non-members have to pay. Such bodies would be those in the public domain that are political, religious, patriotic, philosophical, philanthropic or civic nature. HMRC appears to take a strict approach when applying this exemption but have lost a number of tribunal cases on this point.107 (4)

Where a subscription contains an element of donation, as it might well do in the case of a subscription to a charitable organisation such as the Variety Club of Great Britain, the donation element will not attract VAT.108

102 Value Added Tax Act 1994, s 94(2). 103 For a useful discussion on the concept of multiple supplies, see HMRC VAT  Supply and Consideration Manual VATSC11120. 104 [1974] 1 WLR 1447, CA. 105 [1976] 1 WLR 932, CA. 106 Value Added Tax Act 1994, Sch 9, Group 9. 107 See, for example, the case of Halle Concert Society TC05067, which found that members’ subscriptions were paid for a single supply of a package of rights and benefits, which fell within the philanthropic ‘exemption’ for VAT. 108 Customs and Excise Note No 701.

374

Value Added Tax 17.37 17.34 Exemption for sports services Supplies of sporting services to both members and non-members by non-profit making members’ sports clubs are exempt from VAT.109 This exemption will apply even where the club makes a ‘profit’ on the services. 17.35 Exemption for cultural services Under the ‘cultural services’ exemption,110 qualifying clubs and other organisations111 are exempt from VAT. The VAT exemption covers the admission charge for museums, galleries, art exhibitions or zoos.112 It also covers the admission charge for theatrical, musical or choreographic performances of a cultural nature.113 The services must be provided by a non-profit-making organisation and any profits made from exempt admission fees must be applied to the continuance or improvement of the relevant facilities. 17.36 Exemption for fund-raising events The exemption for fund-raising events applies to the following: (1) supplies of goods and services by charities during charitable fund-raising events where the main purpose is to raise money;114 or (2) where a ‘qualifying body’ supplies goods and services during a fund-raising event organised exclusively for its own benefit and whose primary purpose is the raising of money.115 For these purposes, a ‘qualifying body’ is widely defined to include any non-profit making organisation falling within Item 1 Group 9, Item 1 Group 10, and Item 2 Group 13 of Schedule 9 to the Value Added Tax Act 1994 (the VAT ‘exempt’ categories). This would include organisations that seek advancement of a particular branch of knowledge or the fostering of professional expertise. It also covers sports clubs, museums, religious, patriotic, philosophical, and philanthropic bodies that operate in the public domain.116 These exemptions only apply where the primary purpose is fund-raising. The club therefore has to be careful that HMRC does not have grounds for saying that the event is a social occasion where the fund-raising is of lesser significance.117 17.37 Common forms of taxable supplies made by clubs The common forms are as follows:

109 See VAT Notice 701/45. HMRC v The Bridport and West Dorset Golf Club Ltd [2012] UKUT 272 (TCC) and Kennemer Golf and Country Club v Staatssecetaris van Financiën [2002] QB 1252. 110 Value Added Tax Act 1994, Sch 9, Group 13. 111 Ibid, see notes 1 and 2. 112 In Zoological Society of London v Customs and Excise Commissioners [2002] QB 1252 the VAT exempt treatment of non-members’ day subscriptions and the admission charges to the zoos was upheld on the grounds that the zoos were supplying cultural services. While the zoos had paid employees, they were being ‘managed and administered on an essentially voluntary basis’. 113 See HMRC VAT  Notice 701/47 Culture. Helpful decisions involving ‘cultural’ theatrical productions include Mayflower Theatre Trust Ltd v Revenue and Customs Commissioners [2006] EWCA Civ 116 and Garsington Opera Ltd v HMRC [2009] UKFTT 77 (TC). 114 Value Added Tax Act 1994, Sch 9, Group 12, Item 1. 115 Ibid, Sch 9, Group 12, Item 2. 116 Ibid, Sch 9, Group 12. 117 As was held in the case of the Blaydon Rugby Football Club (VAT Tribunal ref 13901).

375

17.38  The Club’s Liability for Tax and Business Rates (1)

bar sales and catering charges:118 food and drink is standard-rated where it is supplied in the course of catering; this includes food and drink supplied for consumption on the premises and hot take-away food. Premises means the whole clubhouse or its grounds. The VAT rate on food, drink and catering is temporarily reduced to 5% until 12 January 2021 (see 17.31);

(2)

admission charges: these are normally standard-rated.;

(3)

bingo: the payment of VAT depends on whether cash bingo or prize bingo is played. It also depends on whether the club premises are licensed under the Gambling Act 2005. Admission charges are standard-rated save for certain fund-raising events;

(4)

discos, dances, socials and similar events: admission charges are standard-rated other than where they are made from certain fund-raising events (see 17.36). The club must account for VAT on the gross amount of taxable supplies;

(5)

gaming machines: receipts from gaming machines are exempt but are likely to be subject to machine games duty;

(6)

lotteries, raffles, etc: income from lotteries, raffles, totes, instant bingo tickets and so on is generally VAT exempt;

(7)

sponsorship and advertising services: fees from sponsors may not be taxable as a business activity.119 On the other hand, advertising fees may be taxable;

(8)

Letting room on hire: income from letting a room or hall on hire is exempt provided that: (a) the hirer has exclusive use of the room and hall during the period of hire; (b) the room is not designed or equipped for sport or physical recreation; (c) the club has not ‘opted to tax’ the building in which the room or hall is situated (see 17.38). This letting exemption covers related facilities, such as a kitchen or bar, and covers those fixtures and fittings that form part of the hire, such as the lighting and sound equipment.120

17.38 Rent issues Many clubs and organisations pay rent under a lease for their premises. In many cases, landlords would have opted to tax their interest in the property. Therefore, the rent charged to the club etc. would include VAT.121 The VAT input tax on the rent may be reclaimed by the club where it makes taxable supplies (see 17.31). However, where there are exempt activities, such as in relation to subscriptions (see 17.33), the club’s ability to deduct input tax may be restricted. Where a club sub-lets part of its premises this would be an exempt supply (as it would not be covered by the landlord’s option to tax). Clubs should therefore

118 See eg Carlton Lodge v Customs and Excise Commissioners [1974] STC 507. 119 HMRC 701/41/02. 120 HMRC VAT Notice 742 (Land and Property). 121 Value Added Tax Act 1994, Sch 10.

376

Stamp duty land tax 17.41 strongly consider making an option to tax in respect of its leasehold interest in such cases. This can only improve their input tax recovery122 (see 17.32). 17.39 Benefits to employees Some clubs may provide accommodation and other benefits to their employees. For example, a club may provide a flat (which may or may not be part of the club premises) or it may provide the employee with a car or meals or refreshments. (To the extent such benefits are taxable, the club may need to report them to HMRC and they would attract income tax and national insurance contributions.123) The VAT implications of providing these benefits should be considered. As a general rule, the VAT input tax on the cost of providing the benefits should be reclaimable (except in relation to the purchase of a car).124 In some cases, HMRC may seek output tax on the provision of a benefit for private use.125 Where a club reclaims the VAT on private fuel purchased for its employees, a special VAT output charge applies. 17.40 Charities and VAT Like everyone else, charities must charge VAT where they supply goods and services in the course of a business carried on by them. However, a charity can zero-rate goods that have been donated to it. In relatively rare cases, where goods and services are supplied in carrying out the charity’s objects, these supplies should be exempt from VAT.126 Building or repair work to charitable premises qualifies for special rates if suitably certified by the charity.127

8.  Stamp duty land tax 17.41 SDLT is payable not only on the ‘normal’ purchase of UK land but also on the creation, release, surrender, or variation of chargeable UK land interests.128 Special SDLT rules apply on the grant of a lease. However, no SDLT is charged on a (non-exclusive) licence to occupy property. SDLT is also levied on the value of any fixtures substantially attached to the land under land law. Items that retain their character as chattels or moveable property, such as most furniture or carpets, are not subject to SDLT. Under the SDLT legislation, a club or unincorporated association is effectively treated in the same way as a company.129

122 Value Added Tax Act 1994, s 24; Value Added Tax Regulations 1995, Part XIV. 123 See Income Tax (Earnings and Pensions) Act 2003, Part 3. 124 HMRC VAT Input Tax Manual VIT4000. 125 This represents a deemed supply under Value Added Tax Act 1994, Sch 4, para 5(4) but the provision of accommodation is excluded from this rule: Sch 4, para 5(4); PN 700. 126 Value Added Tax Act 1994, s 30 (as amended). 127 Ibid, Sch 8, Group 5. 128 Finance Act 2003, s 43. 129 Ibid, s 100(1).

377

17.42  The Club’s Liability for Tax and Business Rates Different SDLT rates apply for residential and non-residential (and mixed-use property). Broadly, non-residential property is any property that does not fall within the ‘residential property’ definition.130 Most club properties will fall to be treated as non-residential (commercial) properties, and the relevant SDLT rates are: Consideration band

Rate

Up to £150,000

0%

£150,001–£250,000

2%

Above £250,000

5%

Clubs acquiring or leasing property must submit an SDLT return and pay the relevant SDLT liability within 14 days of the relevant land transaction being ‘completed’.131 However, the SDLT charge is brought forward where a land transaction is ‘substantially performed’, such as where a substantial (90%) amount of the consideration is paid (which includes the first ‘rent’ payment on a lease) or where the purchaser takes possession (for example, occupation).

9.  Business rates 17.42 Introduction Every club, however small, which occupies premises will need to understand the legal position concerning its liability for business rates – also known as non-domestic rates. Rates are a property tax and is levied by local government. The imposition of rates is carried out by the local authority in whose area the club property is situated. The Budget 2020 announced that the business rates system is to be reviewed. 17.43 Basic principle The basis on which business rates (or non-domestic rates) operates is: (1)

the occupation of business property; and

(2)

the amount chargeable on the rateable value of that property.132

Broadly speaking, property is defined as domestic where it is wholly used for the purposes of living accommodation.133 It follows from this definition that premises occupied by any club will be ‘non-domestic’ and therefore subject to the business rating regime. 17.44 Occupation There are four necessary ingredients in rateable occupation. They are:134 130 Finance Act 2003, ss 112–119. 131 Ibid, s 42. 132 Local Government Finance Act 1988, s 43(1)–(2). 133 Ibid, s 66(1)(a). For Wales see also Non-Domestic Rating (Definition of Domestic Property) Order 2010, SI 2010/682. 134 John Laing v Kingswood Assessment Committee [1949] 1 KB 344, CA, approved by the House of Lords in London County Council v Wilkins (VO) [1957] AC 362.

378

Business rates 17.47 (1) there must be actual occupation of the property (the strict legal term is ‘hereditament’ being a unit of occupation);135 (2)

there must be exclusive occupation for the particular purpose of the possessor (occupier);

(3)

the occupation must be of some value or benefit to the possessor; and

(4)

the occupation must not be for too transient a period.

17.45 In every case the necessary degree of occupation is a question of fact, not a question of legal title to the property.136 At one end of the scale, a club that uses a club hall belonging to someone else, say once a week or once a month cannot be liable for rates. At the other end, a club that is the freeholder or leaseholder of its premises that are regularly used each week is liable for rates. Some cases fall somewhere in the middle and need to be more carefully analysed. In Peak (VO) v Burley Golf Club,137 the club was held not liable for rates on its golf course since non-members were entitled to play there without paying green fees to the club. On the other hand, in Pennard Golf Club v Richards (VO)138 it was held that the club was liable to pay rates on its golf course even though non-members had ‘rights of way’ access over it. The distinction between the two cases depends on the exclusivity of the occupation. In the Burley Golf Club case, the club members were sharing their occupation of the golf course with outsiders. In contrast, in the Pennard Golf Club case, the club members’ occupation was not diminished by the fact that outsiders had the ability to walk across their land. 17.46 The fact that the club holds the club premises on a licence or a tenancy does not exempt the club from paying rates.139 If a club has exclusive use of part of premises it is liable for rates on that part.140 A club can still be the occupier of premises even where the licensor enjoys occasional use and has possession of a key to the premises.141 17.47 Occupiers’ liability For unincorporated members’ clubs, the actual occupiers are liable to pay the rates. This would be the trustees of the club where the property vests in them or the managing committee.

135 Local Government Finance Act 1988, s 64; Gilbert (VO) v S Hickinbottom & Sons Ltd [1956] 2 QB 40. 136 Holywell Union v Halkyn District Mines Drainage Co [1895] AC 117. 137 [1960] 1 WLR 568. 138 [1976] RA 203. 139 R v Green [1829] 9 B & C 203 (occupants of alms houses); Case (VO) v British Railways Board [1972] 16 RRC 123, CA, at 147 (where a staff association was held liable for rates in respect of club premises held on a licence, terminable on short notice, from the employer). 140 O’Reilly v Cock [1981] 260 EG 293. 141 Squibb v Vale of White Horse District Council and Central Electricity Generating Board [1982] RA 271.

379

17.48  The Club’s Liability for Tax and Business Rates Where there are no trustees,142 individual members of an unincorporated members’ club would not normally be liable for rates.143 However, if the club was relatively small, the members might collectively be held liable for rates as joint occupiers of the premises.144 This liability might arise even though the assessment is on one occupier only.145 The club occupying the property would never be liable itself.146 Working men’s clubs registered under one of the Friendly Societies Acts will automatically have trustees of the club’s property who are responsible for the payment of rates. Community clubs and company clubs are legal persons and will therefore generally be responsible for rates. However, if the club’s property is vested in trustees, the trustees would be liable. The proprietor of a proprietary club would be responsible for the rates. 17.48 Rateable value All non-domestic properties have a rateable value, which is fixed by an independent valuation officer from the Valuation Office Agency.147 The rateable value of a property essentially represents its annual rental value on the open market. The annual rental is based on various assumptions, including the tenant being liable for rates, taxes, repairs, insurance and other expenses necessary to maintain the rental value of the property.148 Generally speaking, the rent for rating purposes is based on a hypothetical tenancy.149 There is no uniform method of valuation.150 Various methods of valuation are applied in order to arrive at the hypothetical rent. These include reference to the actual rent of the property (hereditament); or to comparable rents; and so on.151 In the absence of rental evidence of value, the accounts, receipts or profits of the occupier of the property may be relevant.152 Where there is a strong demand 142 Verrall v Hackney London Borough Council [1983] QB 445, CA, at 461 (May LJ). 143 Ibid, at 462 (where Mr  Verrall, a prominent member and officer of the National Front, an unincorporated association, was held not liable for rates because he was not in actual occupation of the hereditament). 144 Westminster City Council v Tomlin [1990] 1  All  ER  920,  CA (where Mr  Tomlin and seven others formed an unincorporated association called the Guild of Transcultural Studies and occupied the former Cambodian Embassy as trespassers. The rating assessment was on Mr  Tomlin alone but it was held on the facts that all eight were liable for rates as joint occupiers). 145 Ibid. 146 Verrall v Hackney London Borough Council [1983] QB 445, CA, at 461 (May LJ). 147 The last revaluation took effect in April 2017, and the next one is currently scheduled for 2021. Future revaluations will take place every three years thereafter. 148 Local Government Finance Act 1988, Sch 6, para 2(1), as amended by the Rating (Valuation) Act 1999. 149 See R  v West Middlesex Waterworks [1859] 28  LJMC  135, at 137 (case decided under previous rating legislation). And see Tomlinson (VO) v Plymouth Argyle Football Club Ltd [1960] 6 RRC 173, CA, at 179 (Lord Evershed MR): ‘The question is not what would be a fair rent for the landlord, real or hypothetical, to ask but what would be a reasonable rent for a hypothetical tenant and a hypothetical landlord to agree between them’. This inevitably means a compromise of some sort. 150 The Valuation Office Agency Rating Manual (May 2017), section 4. 151 Ibid, section 4, part 1; Practice Note 1, 2017 Rental adjustment; also see GOV.UK, Business rates, ‘How Non-Domestic (Business) Properties Are Valued (Updated at April 2017)’. 152 March (VO) v Gravesend and Northfleet Football Club Ltd [1959] 4 RRC 299 (Lands Tribunal); Tomlinson (VO) v Plymouth Argyle Football Club Co Ltd (cited above) (valuation by reference to gate receipts was rejected).

380

Business rates 17.49 for the same kind of use of similar property the rateable value would generally be the same. On the other hand, where the occupier is the only possible tenant of the property, their ability to pay is likely to be a relevant consideration. A club’s ability to pay has been considered relevant in various cases before the Lands Tribunal with the valuation adjusted.153 In Avondale Lawn Tennis Club v Murton (VO)154 the Lands Tribunal adopted what had been earlier stated by way of principle in Sheffield & Hallamshire Lawn Tennis Club Ltd v Elliott (VO):155 ‘The club is not a competitive profit-making concern and the accounts of its finances, designed to keep it efficient and solvent, cannot be taken as a direct guide to the determination of the rent the hypothetical tenant could reasonably be expected to pay, and in the absence of rental evidence the accepted or undisputed assessments on the comparable hereditaments in the district must be regarded as the principal guide to the annual value of the subject property. I do not however ignore the accounts entirely because they do offer some help in considering the burden of outgoings incurred by a club of this size and age’. 17.49 Rating lists It is a sensible practice for the club to try to agree its valuation with the valuation officer. Once the valuation officer’s valuation has taken place the resulting rateable value is entered in a rating list. There is a statutory duty imposed on valuation officers to compile, maintain, and update central and local non-domestic/business rating lists.156 The club as a person aggrieved157 can appeal against its business rates assessment.158 The process for appealing against business rates in England was revamped in April 2017 – the new system is known as ‘check, challenge, appeal’.159 If the factual details about the relevant property are incorrect, the club must notify the Valuation Office Agency using the online system (known as ‘check’).

153 See Tomlinson (VO) v Plymouth Argyle Football Club  Co  Ltd (cited above); Hitchin Town Football Club v Wallace (VO) [1961] RVR 462; Sussex Motor Yacht Club Ltd v Gilmore (VO) [1966] RA 43; Heaton Cricket Club v Westwood (VO) [1959] 5 RRC 98; Addington Community Association v Croydon Corporation and Gudgion (VO) [1967] 13 RRC 126 (community hall) and Downe Village Residents’ Association v Valentine (VO) [1976] RA 117 (village hall). 154 [1976] RRC 308, at 312. 155 [1966] RA 370. 156 Local Government Finance Act 1988, s 41(1). 157 As to the meaning of ‘a person aggrieved’ see Arsenal Football Club v Smith [1979] AC 1. An unincorporated members’ club is, as a matter of practice, regarded as a person aggrieved: see Warburton on Unincorporated Associations (2nd edn, 1992) p 57; and see R v RL and JF [2009] 1 All ER 786, CA, cited in 1.1. 158 Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009, SI  2009/2268, reg  5(1) as amended by SI  2018/911. Similar provisions apply to Wales: SI 2005/758. 159 Ibid, reg  6(1) and The Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendments) Regulations 2017, SI 2017/155. A different system for challenging business rates applies in Wales: see SI 2005/758.

381

17.50  The Club’s Liability for Tax and Business Rates Alternatively, an appeal can be made against the relevant rating valuation (‘challenge’) but a ‘check’ notice must have been made first. A challenge can be made on certain specified grounds.160 If agreement cannot be reached, or the club wishes to appeal against the valuation officer’s decision, the club can take the matter to the Valuation Tribunal for England.161 Appeals from this tribunal now go to the Upper Tribunal.162 17.50 Calculation of business rates The calculation of the club’s business rates will be based on its rateable value and the relevant multiplier set annually by the government.163 Business rates are broadly calculated as follows: (1)

take the latest rateable value of the property;

(2)

find the relevant multiplier for the area (England, Scotland, Northern Ireland or Wales) – Where the rateable value is £51,000 a standard multiplier is used. If it is below £51,000*, the small business multiplier is used;

(3) the standard business rates charge is found by multiplying the property’s rateable value by the relevant multiplier; (4) deduct any business rate relief (or transitional relief where property was revalued in 2017);** (5) *

the business rates payable is the standard charge in (3) less any deduction in (4).*** Under the Budget 2020, retail, leisure and hospitality businesses occupying properties with a rateable value of less than £51,000 qualify for a one year business rates holiday.

** Relief may be granted in cases of hardship. *** See reliefs in 17.52 and 17.53.

17.51 Relief from rates The position is governed by the Local Government Finance Act 1988 and the Non-Domestic Rating (Discretionary Relief) Regulations 1989.164 Some relief is mandatory, and other relief is discretionary. Many members’ clubs are eligible for rating relief of some sort. 17.52 Mandatory relief The position is as follows: (1)

charitable clubs: charities qualify for a mandatory 80% reduction165 in their business rates provided the property is wholly or mainly used for charitable purposes.166 Registration under the Charities Act  2011 is conclusive proof

160 Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009, reg 4(1). 161 Ibid, reg  20. The Valuation Tribunal for England was set up in 2007. It replaced the 56 valuation tribunals then operating in England. 162 See ibid, reg 21. 163 Ryde on Rating and the Council Tax (14th edn, looseleaf) at E3 (2020). Hitherto the rate had been set locally. 164 SI 1989/1059. 165 Local Government Finance Act 1988, s 43(5). 166 Ibid, s 43(6)(a).

382

Business rates 17.54 that a club is charitable.167 If a club/organisation is not registered under the Charities Act 2011, it can still qualify for relief if it satisfies the rating authority that it is set up for charitable purposes.168 The right to charity relief may be established by proceedings in the High Court for a declaration169 or by resisting proceedings brought by the rating authority for non-payment of rates;170 (2)

community amateur sports clubs (CASCs): registered CASCs business rates are eligible for an 80% reduction provided the property is wholly or mainly used for the purposes of the club;171

(3)

accommodation and facilities for the disabled: these properties are completely exempt from business rates provided they are mainly used for residential accommodation or training facilities for disabled individuals or those suffering from illness. The exemption also extends to properties providing welfare services for the disabled and facilities for their employment/self-employment and so on;172

(4)

small business rates relief: under current rules, small business rate relief applies as follows: (a) rateable value up to £12,000: total exemption; (b) rateable value £12,001–£15,000: tapered relief between 100% and 0%.173

17.53 Discretionary relief The local authority has a discretion whether to grant rating relief provided two conditions are satisfied:174 (1)

the ratepayer comes within the eligible category on the chargeable day;

(2)

there is in force a decision of the billing authority that this discretionary relief should operate.

The amount of relief can be less than is otherwise chargeable or it can be nil.175 17.54 The eligible organisations are: (1)

charitable clubs: see 17.18;176

(2)

community amateur sports clubs: see 17.19;177

167 Wynn v Skegness UDC [1967] 1 WLR 52 (case decided under the former Rating and Valuation Act 1961); Charities Act 1993, ss 4 and 96. 168 Over Seventies Housing Association v Westminster City Council [1974] RA 247. 169 Oxfam v Birmingham City District Council [1976] AC 126. 170 Royal Society for the Protection of Birds v Hornsea UDC [1975] RA 26, DC. It is considered that both procedures (viz declaration and resisting proceedings) are still available under the Local Government Finance Act 1988. 171 Local Government Finance Act 1988, s 43(6)(b). 172 Ibid, s  51, Sch  5, paras  16, 20, 21. Paragraph  16 defines what is meant by ‘facilities’, ‘disabled’ and ‘illness’. 173 Non-Domestic Rating (Small Business Rate Relief) (England) Order 2004, SI 2004/3315, as amended by The Non-Domestic Rating (Reliefs, Thresholds, and Amendment) (England) Order 2017, SI  2017/102. Similar Small Business Rates reliefs are available in Northern Ireland, Scotland and Wales. 174 Local Government Finance Act 1988, s 47(3). 175 Ibid, s 47(4). See Ryde on Rating and the Council Tax (14th edn, looseleaf) at E102 (2020). 176 Ibid, s 47(2)(a). 177 Ibid, s 47(2)(ba).

383

17.55  The Club’s Liability for Tax and Business Rates (3)

institutions with eligible main objects and not for profit: this covers institutions and other organisations not established or conducted for profit. Their main objects must be charitable, philanthropic, religious, education, social welfare, science, literature or the fine arts. A  club is not to be taken as established or conducted for profit merely because it makes a financial surplus from investments or activities.178 ‘Education’ in this context includes dramatic societies.179 ‘Social welfare’ means the needs of the community (to some acceptable standard).180 ‘Fine art’ has been held not to include commercial photography181 or folk dancing;182

(4)

recreational clubs not for profit: this covers clubs, societies or other organisations not established or conducted for profit and whose premises are wholly or mainly used for the purposes of recreation. There is no requirement that the recreation must be open-air recreation nor is it confined to games of physical sport.183 It would seem that making an admission charge for the recreational facility would not prevent the relief.184

17.55 Enforcement If the rate demand is not paid, the billing authority must send a reminder notice to the ratepayer.185 In default of payment, the authority may apply to a magistrates’ court for a liability order.186 If a liability order is made and not complied with, the authority may levy a distress on the ratepayer’s property.187

178 National Deposit Friendly Society Trustees v Skegness UDC  [1959]  AC  293 (surplus from investments); North of England Zoological Society v Chester RDC  [1959] 1  WLR  773,  CA (surplus from operations); Ladbroke Park Golf Club  Ltd v Stratford-on-Avon RDC  [1957] 1 RRC 202 (bar ‘profits’ in a members’ club). 179 Newport Playgoers’ Society v Newport County Borough Council [1957] 1 RRC 279; Trustees of Stoke-on-Trent Repertory Players v Stoke-on-Trent Corporation [1957] 1 RRC 353. 180 National Deposit Friendly Society Trustees v Skegness UDC [1959] AC 293, at 314. It has been suggested that a club concerned with social welfare is probably a charitable organisation within the charities legislation. 181 Royal Photographic Society of Great Britain v City of Westminster and Cane (VO) [1957] 2 RRC 169. This decision may be right on its facts but the stance adopted by the tribunal may be somewhat outdated: the famous Getty Museum in Los Angeles exhibits not only paintings but photographs as part of its collection. Many people think that black-and-white photography is an art form in itself. 182 O’Sullivan v English Folk Dance and Song Society [1955] 1 WLR 907. 183 Ryde on Rating and the Council Tax (looseleaf) at D369 (July 2020). 184 Ibid, at D369. 185 Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989, SI 1989/1058, as amended, reg 11(1). 186 Ibid, reg 12(1). 187 Ibid, reg 14(1). Deferral of payment may be possible under Non-Domestic Rating (Deferred Payments) (England) Regulations 2009, SI 2009/1597. Similar provisions apply to Wales: SI 2009/2154.

384

Chapter 18

The Club’s Responsibility for Crime

1. Introduction 18.1 One definition of a law is an authorised enactment backed by a sanction. We live in a society where the rule of law is paramount. Almost all our activities as individuals are governed by laws, and everyone without exception must obey the law. To break the law commonly involves the commission of a crime, that is to say, an act punishable by the state. Clubs are subject to this regime. In the preceding chapters of this book we have discussed the activities of the club, whether it be the setting up of the club in the first place, its admission of members, the management of its affairs and the carrying on the business of a club, or the payment of its taxes. These activities are by definition set in a legal framework. In the background of all this discussion is the criminal law; it is the silent underpinning of the legal framework. It is true that clubs in the ordinary course of their activities usually manage to steer clear of brushes with the criminal law, but in a highly regulated society, sometimes embracing offences of strict liability, such avoidance is not always possible. It is important, therefore, that the club management has some understanding of this branch of the law. If the club or its members are involved in any accusations of criminal activity, the first thing to do is to contact a local solicitor for help and advice.

2.  Unincorporated bodies 18.2 Overview Unincorporated bodies are not legal persons in the eyes of the common law and it is self-evident that an entity which is not a legal person cannot be guilty of a crime under such law. In Attorney General v Able,1 which concerned the Voluntary Euthanasia Society, Mr Justice Woolf, at 810, said, ‘It must be remembered that [the society] is an unincorporated body and there can be no question of the society committing an offence’. It should be added for the sake of completeness that it is equally self-evident that a member of a club as an individual is subject to the criminal law in the same way as every other citizen. So the question arises; in what way, if any, can an unincorporated body and its members be held criminally liable for activities carried on by the club or for things which occur on the club’s property. The starting point is that by Schedule 1 to the Interpretation

1 [1984] QB 795.

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18.3  The Club’s Responsibility for Crime Act  1978 a person ‘includes a body of persons corporate or unincorporate’. Section 5 of this Act says that ‘unless a contrary intention appears’ words are to be construed in accordance with Schedule 1. It follows as an all-important principle that an unincorporated body is capable of being prosecuted under statute.2 18.3 Unincorporated members’ clubs It follows that there are three routes which may be available to a prosecutor when prosecuting such a club under a statute: (1)

he can bring a prosecution against the club itself;

(2)

he can prosecute the officers of the club under an ‘officers’ liability clause’;

(3)

he can prosecute the members of the club.

18.4 The law relating to the criminal responsibility of unincorporated associations was restated by the Court of Appeal in R v RL and JF (‘the RL case’),3 which was followed by the later Court of Appeal case, R v Lear and Lear (‘the Lear case’).4 The RL case (2008) In a golf club, which was an unincorporated members’ club, an underground pipe taking heating oil from its storage tank to the boiler was fractured when independent building contractors carried out work on the ground above. The heating oil escaped and some 1,500 litres found its way into a nearby watercourse, polluting the same. The Environment Agency prosecuted two members of the club, selecting the club chairman and the club treasurer, under the strict liability of the Water Resources Act 1991. In the Taunton Crown Court questions were raised on a preliminary issue relating to the criminal liability of the club and of its individual members, the trial judge ruling that the two members could not be convicted without personal liability. It was accepted by the prosecution that neither defendant was personally culpable in any manner. The Court of Appeal allowed the prosecutor’s appeal on the question of law. The Lear case (2018) Mr and Mrs Lear were husband and wife and the partners who owned the White Lion Hotel in Upton upon Severn, where a hotel guest accidentally fell to his death from a bedroom window. The local authority prosecuted them as employers under the strict liability of the Health and Safety at Work Act 1974 on the basis that the low sash window created a risk of falling out and they had failed to conduct any risk assessment concerning their guests and employees. At a preparatory hearing the judge held that the Lears had a case to answer and the Court of Appeal dismissed their appeal, citing passages from the RL case. 18.5 Prosecuting the club The question which had to be decided in the RL case was whether the Water Resources Act  1991 did demonstrate that contrary intention referred to in 18.2. The Court of Appeal, taking a different view from the prosecutor, came to the conclusion that no contrary intention could be deduced from the 1991 Act and therefore the Environment Agency was at liberty

2

R  v W  Stevenson & Sons (a partnership) [2008]  EWCA  Crim 273, [2008] 2  Cr App  R  14 (p 187). 3 [2008] EWCA Crim 1970. 4 [2018] EWCA Crim 69.

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Unincorporated bodies 18.7 to prosecute the club. But no hard and fast rule can be applied, as the court said, at [22]: ‘Notwithstanding the generality of the definition in Schedule  1 to the Interpretation Act  1978, there is no doubt that several statutes do make specific provision for the criminal liability of unincorporated associations. However, on inspection, these provisions vary so greatly that there is no settled policy which can be discerned from them, and we find it impossible to draw from them any general proposition that there is a form of enactment which is to be expected if an unincorporated association is to be criminally liable, and of which the absence signals a contrary intention for the purposes of section 5 of the Interpretation Act 1978.’ So each statute has to be examined to ascertain the answer as to what criminal liability attaches to the club and/or its members. We add that the Court of Appeal was at pains to point out, at [30], that their decision was limited to the strict liability offence in question and did not encompass those offences where intention or foresight was required to prove the offence: ‘We do not for a moment consider any offence which involves any element of mens rea, which would be likely to raise quite different questions because of the personal and individual nature of a guilty mind. In such a case, it may well be that a contrary intention appears.’ 18.6 Prosecuting the officers Some statutes relating to the criminal liability of unincorporated bodies contain what is called an ‘officers’ liability clause’ whereby criminal liability is extended to individuals in cases of personal culpability. For example, section 76(6) of the Health Act 2006 states: ‘If an offence committed by an unincorporated association (other than a partnership) is proved– (a)

to have been committed with the consent or connivance of an officer of the association or a member of its governing body, or

(b)

to be attributable to any neglect on the part of such an officer or member,

the officer or member as well as the association is guilty of the offence and liable to be proceeded against and punished accordingly.’ The ‘officers’ liability clause’ leaves no doubt that in specified cases the officers or members of the governing body of an unincorporated body can be prosecuted in respect of the aiding and abetting, or the conniving, of an offence or because of some neglect on their part. For example, the Water Resources Act 1991 contained no officers’ liability clause so that no criminal liability could arise via this route in the RL case. 18.7 Prosecuting the members In the RL case the judge held that, in the absence of an officers’ liability clause and in the absence of personal culpability on their part, no individual member could be prosecuted. The Court of Appeal reversed this ruling and held that all 900 members were guilty of the offence. Why did the Court of Appeal come to this decision? Lord Justice Hughes in giving the judgment of the court, at [3] stated: 387

18.8  The Club’s Responsibility for Crime ‘The club had 900 or so members. Any one of those members would have been in an identical legal position.’ The judgment continued at [33] and [34] as follows: ‘Although many statutes make it possible to prosecute an unincorporated association, and although we have held that this is perfectly possible under section 85 of the Water Resources Act [1991], it does not follow that such an association is for all purposes the same as a company or other corporation. It is not. A corporation has, for all legal purposes, independent personality… An unincorporated association may indeed look very like a corporation in some cases, and it may have standing and de facto independence, but equally it may not. A prosecution which could only be brought against an informal group of building workers, or sportsmen, or campaigners would be wholly ineffective. It is a necessary consequence of the different nature of an unincorporated association that all its members remain jointly and severally liable for its actions done within their authority. In the present case, the 900odd members of the club were indeed all maintainers of the tank and, on the law as explained in Empress Car Co,5 all [are] guilty of the strict liability offence of causing the leakage … [The liability] arises because, as Empress Car  Co holds, each person jointly maintains the tank and has thus caused the leak.’ (Emphasis added) In the Lear case the President, Sir Brian Leveson, in giving judgment of the court, at [41] stated: ‘In our judgment, what is true for a membership consisting of 900 odd members is equally true (if not a fortiori) of a partnership consisting of two partners … Thus, if it is arguable that the individual applicants [Mr and Mrs Lear] were the employers (as their own documentation appears to suggest), then, as employers, they have imposed upon themselves the duty under section 3 [of the Health and Safety at Work Act 1974] in relation to the overall undertaking, namely the running of a hotel, irrespective of the individual roles of each particular partner, just as, in the RL case, each member of the golf club was potentially liable even though not an executive officer or committee member of the club.’ (Emphasis added) 18.8 We next refer the reader to part of the summary of Lord Hoffmann’s speech in the Empress Car case6 at 35: ‘(1) Justices dealing with prosecutions for ‘causing’ pollution under section 85(1) [of the Water Resources Act 1991] should first require the prosecution to identify what it says the defendant did to cause the pollution. If the defendant is said to have done nothing at all, the prosecution must fail: (2) The prosecution need not prove the defendant did something which was the immediate cause of the pollution: maintaining tanks, lagoons or sewage systems full of noxious liquid is doing something, even if the immediate

5 6

Empress Car Company (Abertillery) Ltd v National Rivers Authority [1999] 2 AC 22. [1999] 2 AC 22.

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Vicarious liability 18.12 cause of the pollution was lack of maintenance, a natural event or the act of a third party.’ 18.9 The crucial element of criminal liability in the RL and Lear cases was the lack of maintenance on the part of the natural defendants, that is, in relation to the oil tank and the sash window. The duty of maintenance was dealt with in the Empress Car case, which explained that if the defendant ‘has done nothing at all’ he has no liability. This doing-nothing-at-all reflects the situation of the ordinary club member. It is true that in an unincorporated members’ club he has co-ownership of the club property7 but he has nothing to do with the management of the club or its property, which task is restricted to its officers and the Committee.8 Accordingly, the ordinary club member has no contractual duty imposed on him to maintain the club property. And the absence of this duty is wholly consistent with the wellknown principle that his one and only contractual liability in relation to the club’s affairs is to pay his subscription on time.9 Thus we respectfully dissent from the rulings in the RL and Lear cases which held or agreed that every one of the 900 club members was susceptible to criminal liability. 18.10 It follows, however, from Lord Hoffmann’s second proposition in 18.8 that it was not improper for the Environment Agency to prosecute the chairman and treasurer of the golf club, even though they were not personally culpable for the cause of the pollution. One assumes that they were members of the managing committee and as such would have been responsible for the maintenance of the oil tank. It was also a known fact that it was a third party, the building contractors, who were responsible for the leak, but unhappily this would have been irrelevant to the Committee’s strict liability under the Water Resources Act 1991. This is yet another example why proper insurance should be in place for the committee members in an unincorporated members’ club.10

3.  Corporate bodies 18.11 Corporate bodies, such as community clubs and company clubs, are legal persons and so can be prosecuted and fined, or committed for sentence to the Crown Court.11 None of the difficulties which arise with unincorporate bodies, as discussed above, are applicable here.

4.  Vicarious liability 18.12 Overview A problem arises when a person, who may or may not be a member of the club, commits a criminal offence in the course of his activities on behalf of the club. Who in the club, apart from the wrongdoer himself, can be held

7 See 8.3. 8 See 1.12 and 5.21. 9 See 1.11 and 4.28. 10 See 13.19(6). 11 R  v Tyler and the International Commercial  Co  Ltd [1891] 2  QB  588; Powers of Criminal Courts (Sentencing) Act 2000, s 3.

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18.13  The Club’s Responsibility for Crime responsible? The answer lies in the doctrine of vicarious liability.12 First, in relation to members, the club will not be liable for a criminal offence simply because it has been committed by a member. In an unincorporated members’ club it is the managing committee and the officers who will in many instances be facing liability. In a corporate club, whether the act of an agent (member) is to be attributed to the club is to be decided on the issue of the closeness of the relationship between the agent and the club. The guilty mind of an agent who is not closely identified with the management of the club will not render it liable, whereas the guilty mind of a member-director or a member-manager will do so.13 Secondly, in relation to employees, a club whether corporate or unincorporate may be held liable for the criminal consequences of the acts and omissions of its employees who were acting within the course of their employment, regardless of whether those employees can be said to be exercising the controlling mind of the club.14 18.13 Knowledge No hard and fast rule can be laid down as to when the Committee or officers might be held liable. At common law a person can be held liable for ‘aiding and abetting’ a crime where he is not the principal offender. It is normally the case that offences are committed only when the accused knowingly does something which the criminal law forbids him to do. The lack of knowledge does not always allow the principal to escape liability where an employee or subordinate has committed the offence without the knowledge or connivance of the principal.15 This is because of the operation of the doctrine of vicarious liability. Consider the following trilogy of unlawful drinking cases.16 In Vane v Yiannopoullos17 the licensee of a restaurant was physically present in the premises and actively in control when, unbeknown to him, an employee committed the offence of serving intoxicating liquor to customers who had not ordered a meal. The House of Lords upheld his acquittal of knowingly selling to persons to whom he was not permitted by the conditions of his licence to sell,18 on the basis that he had no knowledge of the commission of the offence. Lord Reid said that there was a long-standing distinction between, on the one hand, the vicarious liability of a licensee for the acts done without his knowledge by an employee to whom he has delegated the entire management of the premises and, on the other hand, his non-liability for such acts done while he himself retains the general supervision of the premises. In R v Winson19 the licensee of a licensed club took no active part in the running of the club and delegated this task to a manager who unlawfully permitted alcohol to be sold to persons who had not been members for 48 hours.20 The licensee was

12 See Archbold, Criminal Pleadings, Evidence and Practice (2020 edn) paras 1–135 ff and 17– 26 ff. 13 H L Bolton (Engineering) Co Ltd v T J Graham and Sons Ltd [1957] 1 QB 159, CA, at 172 (Denning LJ); John Henshall Quarries Ltd v Harvey [1965] 2 QB 233, DC. 14 National Rivers Authority v Alfred McAlpine Homes (East) Ltd [1994] 4 All ER 286 (company held liable for the conduct of its employees who caused pollution of a controlled water supply). 15 Mousell Bros Ltd v London and North Western Railway Co [1917] 2 KB 836, at 844 (Viscount Reading CJ). 16 Licensing offences are now largely dealt with under Part 7 of the Licensing Act 2003, but the question of ‘knowledge’ is still relevant. 17 [1965] AC 486. 18 Contrary to the Licensing Act 1961, s 22(1). See now Licensing Act 2003, s 136(1) and (5) and the ‘due diligence’ defence provided by section 139. 19 [1969] 1 QB 371, CCA. 20 Contrary to the Licensing Act 1964, s 161(1). See now Licensing Act 2003, s 136(1) and (5) and the ‘due diligence’ defence provided by section 139.

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Vicarious liability 18.15 convicted of knowingly selling alcohol unlawfully. And in Anderton v Rogers21 alcohol was unlawfully sold to a non-member of an unincorporated club.22 The members of the Committee were unaware of this fact yet were convicted of knowingly selling alcohol unlawfully. 18.14 Part of the reason why the accused were found guilty in the two lastmentioned cases was because knowledge not only includes actual knowledge but also includes deliberately shutting one’s eyes or mind to an obvious means of knowledge.23 Thus simply appointing a manager of a club and leaving him to get on with the job will not normally exonerate the Committee from criminal liability, as Lord Reid stated in the case of Vane. The Committee will be expected to put in place proper procedures for managing and supervising the activities being carried on at the club.24 In Linnett v Metropolitan Police Commissioner25 an absentee licensee of a public house was convicted of ‘knowingly permitting disorderly conduct’ where he had left control of the premises to another, who had in fact knowingly permitted the conduct complained of. Lord Goddard CJ, at 295, said: ‘If the manager chooses to delegate the carrying on of the business to another, whether or not that other is his servant, then what that other does or what he knows must be imputed to the person who put the other into that position.’ The members of the Committee would not, however, be responsible for the criminal acts of a stranger or third party who committed an offence on club premises without their knowledge or in their absence.26 18.15 Strict liability and due diligence These days the Committee or the club as employer will have to take cognisance of many statutory obligations set out in various Acts of Parliament which regulate club activity, for example, the Licensing Act 2003, the Gambling Act 2005, the Weights and Measures Act 1985, and the health and safety legislation. The obligations are often offences of strict liability, that is to say, the offence can be committed without any fault of the part of the Committee or the club. As Lord Parker LCJ said in John Henshall (Quarries) Ltd v Harvey,27 ‘There is no doubt that in the case of absolute offences, as they are sometimes called, a master, whether an individual or a company, is criminally liable for the acts of any servant acting within the scope of his authority’.28 In some statutes Parliament has permitted a defence of due diligence whereby the accused can escape liability if he can prove that he took all reasonable steps to ensure compliance with his statutory obligation: see, for example, section 139(1) of the Licensing Act  2003 discussed in 18.20. In the case of a company club, reliance on this defence may be more difficult to achieve because the state of mind of an employee or member who is a ruling officer of the company may be attributed

21 [1981] Crim LR 404. 22 Contrary to the Licensing Act 1964, s 160(1). See now Licensing Act 2003, s 136(1) and (5) and the ‘due diligence’ defence provided by section 139. 23 Goodwin v Baldwin (1974) Times, 2  February; Buxton v Chief Constable of Northumbria (1983) 148 JP 9; Oxford v Lincoln (1982) Times, 1 March. 24 R v Souter [1971] 1 WLR 1187. 25 [1946] KB 290. 26 Taylor v Speed [1979] Crim LR 114. 27 [1965] 2 QB 233, DC, at 239. 28 For ‘master’ read ‘employer’ and for ‘servant’ read ‘employee’. The world has moved on since 1965.

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18.16  The Club’s Responsibility for Crime to the company.29 In an unincorporated members’ club, the knowledge of one individual member will not be attributed to another individual member. It follows from this fact that if the committee member as principal is acquitted under the ‘due diligence’ defence in relation to a non strict-liability offence, the employee or the member, who will have been the perpetrator of the offence, will likewise be acquitted.30

5.  Statutes where criminal liability may fall on the club 18.16 Constitutional matters: criminal offences In setting up the club and then dealing with formal matters thereafter, the officers and the managing committee of a club which derives its constitutional powers wholly or in part from some statute must as a matter of course comply with the provisions of the statute in question. Failure to comply with certain provisions may involve the club, its officers and its governing body in prosecution for criminal offences. A detailed discussion of the individual offences is beyond the scope of this book but we point out below where some of the offences are described: •

Literary and Scientific Institutions Act 1854: section 26;

•

Friendly Societies Act 1974: sections 98–101;

•

Companies Act 2006: Part 36 (sections 1121–1133);

•

Charities Act 2011, sections 41, 173, 346;

•

Co-operative and Community Benefit Societies Act 2014, Part 10;

•

Data Protection Act 2018, sections 119, 144, 148, 170, 171, 173, 184, 198; Schedule 15, paragraph 15.

18.17 Managerial matters: criminal offences In carrying out its activities it is not unlikely that a club will be confronted on occasion with the criminal law and the case of R v JL and JF 31 described in 18.4 is a good example of how this may come about. Set out below are some areas where criminal responsibility may intrude into the club’s life. 18.18 Alcohol licensing The Licensing Act  2003 created a whole range of new offences, most of which are contained in Part  7 of the Act, under the heading of ‘Unauthorised licensable activities’. It is important that the members of the Committee supplying or selling alcohol to members and guests familiarise themselves with the licensing offences, which fall into three categories: (1)

offences relating to the management of the licensable activity (sections 136– 138);

(2) offences relating to the premises where the licensable activities are being carried on (sections 140–153); (3) offences arising from the various duties connected with the application process.

29 Coupe v Guyett [1973] 1 WLR 669, DC, at 675 (Lord Widgery CJ). 30 Ibid (a prosecution under the Trade Descriptions Act 1968). 31 [2008] EWCA (Crim) 1970.

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Statutes where criminal liability may fall on the club 18.21 Examples of the third category are: (a) the offence under section 96 of obstructing an ‘authorised person’32 in the exercise of the power to enter and inspect club premises on an application for a premises certificate; (b) the offence under section 108 of obstructing an ‘authorised officer’33 (rather than an authorised person) in the execution of his right to enter premises to which a temporary event notice relates in order ‘to assess the likely effect of the notice on the promotion of the crime prevention objective’;34 and (c) the offence of failing to keep, display and produce a temporary event notice.35 Indeed, it may be said that, wherever there is a right conferred on the licensing authority or a duty imposed on the person carrying on the licensable activity, obstruction of the licensing authority in the exercise of its rights, or the failure to fulfil the imposed duty, will render that person liable to prosecution for a summary offence. 18.19 If an offence under the 2003 Act has been committed by a club (whether incorporated or unincorporated) and it is shown to have been committed with the consent or connivance of an officer of the club or a member of its governing body,36 or to be attributable to his neglect,37 that officer or member is also guilty of the offence.38 18.20 Defence of due diligence This is provided by section 139 of the Licensing Act  2003. Where a person (this includes a club)39 is charged with: (a) carrying on an unauthorised licensable activity;40 or (b) exposing alcohol for unauthorised sale;41 or (c) keeping alcohol on premises for unauthorised sale;42 it is a defence if: (1) his act was due to a mistake, or to reliance on information given to him, or to an act or omission by another person, or to some other cause beyond his control;43 and (2) he took all reasonable precautions and exercised all due diligence to avoid committing the offence. Another example where the defence of due diligence applies is on a charge of selling alcohol to a child (ie a person under the age of 18 years).44 It is also a defence to this particular offence that the person charged had a reasonable belief that the individual concerned was over 18.45 18.21 Personal liability of club member An important point to note is that in the case of the offences of:

32 Licensing Act  2003, s  69(2): that is, an officer of the licensing authority, an inspector appointed under the Fire Precautions Act  1971 or the Health and Safety at Work etc Act 1974, and an environmental health inspector. 33 Licensing Act 2003, s 108(5): that is, an officer of the licensing authority. 34 Ibid, s 108(3). 35 Ibid, s 109(4). 36 See A-G’s Reference (No 1 of 1995) [1996] 1 WLR 970. 37 See Huckerby v Elliott [1970] 1 All ER 189, DC (which concerned the New Embassy Club owned by a limited company and where the defendant’s conviction was quashed because the prosecution had not proved that the offence of using the premises without a gaming licence was attributable to her neglect, she having properly relied on another director). 38 Licensing Act 2003, s 187. 39 Ibid, s 146(2). 40 Ibid, s 136. 41 Ibid, s 137. 42 Ibid, s 138. 43 Ibid, s 139(1)(a). 44 Ibid, s 146(6). 45 Ibid, s 146(4).

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18.22  The Club’s Responsibility for Crime (1) allowing disorderly conduct on premises covered by a club premises certificate;46 (2)

selling alcohol to a person who is drunk;47

(3)

keeping smuggled goods;48

(4)

breach of the prohibition of unaccompanied children in certain premises;49

(5)

allowing the sale of alcohol to children;50

(6)

consumption of alcohol by children;51

(7)

delivering alcohol to children;52 and

(8)

the prohibition of unsupervised sales by children,53

an offence is committed by any member or officer of the club who is present at the premises at the time of the offence in question in a capacity which enables him to prevent it.54 This provision is contained in each of the sections creating these offences, and means that any club member present at the time when the prohibited conduct is taking place, and knowing it is taking place, will potentially be guilty of an offence. The courts, however, will find themselves with the task of deciding in individual cases whether the person charged was present in a capacity which enabled him to prevent the conduct in question. Does this imply an element of formal control over the club activities at the relevant time? On the face of it, we think not. Theoretically any adult club member could be said to have some responsibility for ensuring the lawful running of his own club, and consequently to be present in the requisite capacity. What, then, of the club member who is quietly minding his own business in a corner of the bar when he notices someone who plainly looks under the age of 18 going up to the bar and ordering an alcoholic drink which is supplied to him, and then he sees this person consuming the drink at the bar? Let us assume this supply and consumption of alcohol constitute criminal offences.55 The member’s natural instinct might be to shrug his shoulders and to continue to mind his own business, but under the 2003 Act he could be held to be present in a capacity which enabled him to prevent the unlawful conduct. By his inaction he may find himself guilty of a criminal offence. 18.22 Club rules These are commonly altered, often for minor corrections, improvements or additions. Every alteration, however small, must be notified by the club secretary to the licensing authority within 28 days following the day on

46 47 48 49 50 51 52 53 54

Licensing Act 2003, s 140(2)(c). Ibid, s 141(2)(c). Ibid, s 144(2)(c). Ibid, s 145(3)(c). Ibid, s 147(4)(b). Ibid, s 150(3)(b). Ibid, s 151(5)(b). Ibid, s 153(4)(b). See also the similar duty imposed under the Licensing Act  2003 (Mandatory Licensing Conditions) Order 2010, SI 2010/860, referred to at 9.21(1)(a). 55 See Licensing Act 2003, ss 147 and 150.

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Statutes where criminal liability may fall on the club 18.25 which the alteration was made,56 in default of which the secretary commits an offence.57 18.23 Food law For consumer protection certain offences have been established which, in relation to clubs, apply to both sale and supply: Food Safety Act 1990: (1)

section 7: rendering food which is injurious to health with intent that it be sold.58 For example, adding or subtracting an ingredient in the preparation of food, say adding sugar as an ingredient when the item in question is to be consumed by a diabetic;

(2)

section 14: this section has taken over the role as the principal protector of the consumer in relation to unsatisfactory food, that is to say, any person who sells to the purchaser’s prejudice any food which is not of the nature or the substance or the quality demanded by the purchaser shall be guilty of an offence;59

(3)

section 15: falsely describing or presenting food for sale. For example, selling or supplying food as chocolate which did not contain the required amount of cocoa solids, or incorrectly stating the food’s geographical origin or country. The maximum fine under section 15 is £5,000;60

(4)

section 35: the maximum fine under sections 7 and 14 is £20,000 or, if the case is conducted in the Crown Court, the offender is subject to an unlimited fine and/or a prison sentence of up to two years.

Food Safety and Hygiene (England) Regulations 2013: (5)

regulation 19(1): contravening or failing to comply with the specified EU provisions is an offence eg non-compliance with a hygiene prohibition order;

(6)

regulation 19(2): the offender is liable on summary conviction to a fine of not exceeding the statutory maximum or, on conviction on indictment, is liable to imprisonment for a term not exceeding two years or to a fine or to both.

18.24 Offence due to third party Section 20 of the Food Safety Act 1990 and regulation 11 of the Food Safety and Hygiene (England) Regulations 2013 have similar provisions. This states that where the commission by any person of an offence is due to the act or default of some other person, that other person may be charged and convicted of the offence, whether or not proceedings are taken against the first-mentioned person. Thus a local authority may bring proceedings against a manufacturer, an importer, a supplier, an agent, or even against an employee61 in addition to or instead of the club as the principal offender. 18.25 Defence of due diligence Section 21 of the Food Safety Act 1990 and regulation 12 of the Food Safety and Hygiene (England) Regulations 2013 have

56 Licensing Act 2003, s 82(4). 57 Ibid, s 82(6). 58 See also Regulation 178/2002, article 14(4), sub-paras (a)–(c). 59 See 10.26 for the meaning at law of the nature, substance and quality of food demanded by a purchaser. 60 See Food Standards Agency’s Guide (2009), para 40. 61 See Tesco Supermarkets Ltd v Nattrass [1972] AC 153.

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18.26  The Club’s Responsibility for Crime similar provisions. This states that it shall be a defence for the person charged to prove that he took all reasonable precautions and exercised due diligence to avoid the commission of the offence by himself or by a person under his control. In Texas Homecare Ltd v Stockport Metropolitan Borough Council,62 a case concerning the sale of goods falsely described as complying with a BS standard, Lord Justice Lloyd stated: ‘reasonable diligence required the appellants to establish some kind of system, whether by random sampling of the goods or whatever, to ascertain whether the goods conformed to the description. That does not mean that the system had to be fool proof – no system could be that. Nor did the appellants have to examine every article. But they did have to do something.’ What due diligence is required in any particular situation will depend on the facts, including the size and resources of the defendant’s business. Precautions which might be sensible and reasonable for a large retailer to adopt might not be reasonable for a village cricket club to adopt.63 18.26 Serious offence Gross negligence manslaughter is a common law offence committed where the defendant owed a duty of care to the deceased; where there was a breach of that duty of care; and the death was a result of a grossly negligent act or omission on the part of the defendant.64 It is triable only on indictment, and carries a maximum sentence of life imprisonment. For an example, see R v Zaman,65 where the defendant, a restaurant owner in Easingwold, North Yorkshire, despite having recently been warned by the local Trading Standards Department about the danger of peanut content in food to those with a nut allergy, ignored that advice. A young purchaser of a takeaway meal, having been assured by the waiter from whom he ordered the meal that it contained no nuts, suffered anaphylactic shock which resulted in his death. The defendant was found guilty by the jury of gross negligence manslaughter and was sentenced to six years’ imprisonment, and this conviction and sentence was upheld by the Court of Appeal. 18.27 Gambling Parts 3 and 4 of the Gambling Act 2005 contain general offences concerning the provision of gambling facilities and the use of premises in connection therewith. The basic mechanism for ensuring compliance with the gambling regime is the creation of an offence under section 33 that the provision of gambling facilities and the use of premises in connection therewith shall be an offence unless either: (a) the gambling activity is licensed and conducted within the terms of the licence; or (b) an exemption applies under section  33(2), the relevant ones for clubs being exempt equal-chance gaming (see 12.9) and noncommercial equal-chance gaming (see 12.14). The 2005 Act contains other specific offences, for example, section 53 concerning the employment of a child (but not a young person) in gaming activities; sections 54–55 on employment of children and young people, and sections 258–263 concerning the promotion and conduct of lotteries.

62 [1987] 152 JP 83, CA. 63 See Atwood, Thompson & Willett, Food Law (3rd edn, 2009) para 20.3.5. 64 R v Adomako [1994] UKHL 6. 65 [2017] EWCA Crim 1783.

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Statutes where criminal liability may fall on the club 18.30 18.28 Landlord and tenant Whereas the Rent Act 1977 contains a number of offences in relation to the operation of controlled tenancies,66 the Housing Act 1988 contains only one offence in relation to assured tenancies, namely, the landlord’s failure to give a written statement to the tenant of the terms of his tenancy.67 The Protection from Eviction Act 1977 continues in force and this Act contains criminal offences in the event of breach (see 15.49).68 18.29 Health and safety The club’s duty as employer towards its employees is discussed at 16.37. The sanction for breaking the law here is primarily contained in section 33 of the Health and Safety at Work etc Act  1974 which has created various offences for breach of the Act itself and in some cases for breach of the regulations issued thereunder. Following concern that many breaches of health and safety legislation did not result in serious enough penalties, the Health and Safety (Offences) Act  2008 was enacted which substantially increased the maximum penalties.69 Offences triable on indictment are now punishable by fine and/or imprisonment of up to two years. 18.30 Smoking ban Part 1 of the Health Act 2006 was enacted to protect the health of the public by imposing a ban on smoking in public places and workplaces. This part of the Act came into force on 1 July 2007. Premises are to be smoke-free if: (a) they are enclosed or substantially enclosed;70 and (b) they are open to the public71 or comprise a shared workplace.72 The phrase ‘open to the public’ means that the public or a section of the public has access to the premises in question, whether by invitation or not or whether on payment or not.73 This definition therefore includes club members attending their club premises since they will count as a section of the public.74 There are certain exemptions, one of which is a designated bedroom in a members’ club,75 provided the room is clearly marked as a bedroom where smoking is permitted.76 Apart from this exemption, no other exemption is permitted in respect of premises where a club premises certificate or a premises licence has effect.77 The club as occupier or its managing committee is required to put up a ‘No Smoking’ sign at the entrance to the club premises.78 An offence is committed by a person who smokes in a smoke-free place79 and an offence is committed by a person who controls or is concerned in the management of smoke-free premises if he fails to stop someone smoking in a smoke-free place.80

66 67 68 69

Rent Act 1977, ss 57(5), 81(4), 92(2), 94(5), 95(2)–(3), 119(2), 120(2), 122(2) and 124(1). Housing Act 1988, s 20A(4), added by Housing Act 1996, s 97. Protection from Eviction Act 1977, s 1, as amended by Housing Act 1988, s 29. Health and Safety at Work etc Act 1974, Sch 3A, inserted by Health and Safety (Offences) Act  2008, s  1. The maximum fines are now unlimited for offences dealt with in the magistrates’ courts, increased by the Legal Aid, Sentencing and Punishment of Offenders Act 2012, s 85. 70 Health Act  2006, s  2(4). For the definition of ‘substantially enclosed’ see Smoke-free (Premises and Enforcement) Regulations 2006, SI 2006/3368, reg 2. 71 Ibid, s 2(1) and (3). For the definition of ‘substantially enclosed’ see Smoke-free (Premises and Enforcement) Regulations 2006, SI 2006/3368, reg 2. 72 Health Act 2006, s 2(2)–(3). 73 Ibid, s 2(7). 74 See Jennings v Stephens [1936] 1 Ch 469, CA, at 482, cited in 11.5. 75 Smoke-free (Exemptions and Vehicles) Regulations 2007, SI 2007/765, reg 4(1). 76 Ibid, reg 4(2)(f). 77 Health Act 2006, s 3(3). (But see 11.20 for a small smoking-ban exception.) 78 Ibid, s 6(1); Smoke-free (Signs) Regulations 2012, SI 2012/1536, reg 3. 79 Health Act 2006, s 7(2). 80 Ibid, s 8(4).

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18.31  The Club’s Responsibility for Crime Enforcement is carried out by the local council81 and it is an offence to obstruct an authorised officer of the enforcement authority acting in the exercise of his functions under the Act.82 18.31 Revenue offences In addition to the many penalties imposed for filing incorrect corporation tax returns or failing to file them when required, the powers of HM  Revenue and Customs (‘HMRC’) are in some cases backed by criminal sanctions. There are severe penalties imposed for knowingly preparing or assisting the preparation of an incorrect tax return83 and the Court of Appeal in Saunders v Edwards84 indicated that supplying false information to HMRC or deliberately manipulating values or figures with a view to reducing the tax bill could involve a wide range of criminal offences. These will include forgery in putting forward the tax return as being a genuine document, fraud by making knowingly false statements and statutory offences such as false accounting.85 HMRC is given wide powers to call for information in the form of written records or oral statements and has the power to enter upon premises and seize documents. It is generally regarded as more effective from the point of view of HMRC simply to raise an estimated assessment which puts the onus on the taxpayer to produce documentation to challenge it. In general, HMRC would prefer to have corporation tax paid together with any penalties and interest and there is a tendency not to prosecute provided that a reasonable settlement can be obtained as regards unpaid corporation tax and penalties. This requires full and frank disclosure of all relevant material by the taxpayer. In relation to value added tax (‘VAT’) there is a tendency for HMRC to take the view that a criminal prosecution should take priority over an appeal to an appropriate VAT tribunal. This means that there may be a prosecution before the taxpayer has established that there is no incorrect return or that the correct amount of VAT has been paid. If the correct amount of VAT can be established as having been paid then there is, prima facie, no criminal offence and, should HMRC wish to press for a prosecution while there is a dispute as to liability, this should be strenuously resisted since a criminal trial in front of a jury is not necessarily the most efficient vehicle for determining whether there is a liability to tax.

6.  Alternative civil sanctions 18.32 A  development took place in relation to offences under the Regulatory Enforcement and Sanctions Act 2008 which came fully into force on 6 April 2009. The government decided it was more efficient to let certain regulators impose civil sanctions in certain areas of activity rather than prosecutions being launched against offenders. The designated regulators86 have been given the power to impose by notice certain sanctions in lieu of prosecution. Broadly speaking the sanctions are:87 (1)

the payment of a fixed monetary penalty in respect of a relevant offence;

81 82 83 84 85 86 87

Health Act 2006, s 10; Smoke-free (Premises and Enforcement) Regulations 2006, reg 3. Health Act 2006, s 11. Details are available on the gov.uk website. [1987] 1 WLR 1116, CA, at 1133. Fraud Act 2006; Theft Act 1968, s 17. Regulatory Enforcement and Sanctions Act 2008, s 37(1) and Sch 5. Ibid, s 42(1) and (3).

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Serious offences 18.34 (2)

the requirement to take steps to secure that the offence does not continue or recur; and

(3) the requirement to take steps within a specified period to secure that the position, so far as is possible, is restored to what it had been, had the offence not been committed. 18.33 The regulators which may involve clubs are the Environment Agency, the Financial Conduct Authority, the Food Standards Agency, the Gambling Commission, the Health and Safety Executive, the Information Commissioner and, the relevant local authority Public Health and Trading Standards Departments. The relevant offences are those contained in a statute in respect of which the regulator has an enforcement function88 and which existed at the date of the enactment of the 2008 Act.89 The Act lists the qualifying statutes where these sanctions may be imposed90 and one of the qualifying statutes is the Health and Safety at Work etc Act 1974. The regulator has to be satisfied beyond reasonable doubt that the offence has been committed.91 The monetary penalty in relation to a summary offence must not exceed the maximum sum which could be imposed on conviction.92 Where a sanction is imposed, the offender is protected from prosecution until such time as the notice expires.93 The penalty procedure is subject to appeal to a tribunal.94 It is envisaged by the government that the use of alternative civil sanctions will improve the level of compliance with health and safety and other important legislation.

7.  Serious offences 18.34 Corporate manslaughter The Corporate Manslaughter and Corporate Homicide Act 2007 created a new statutory offence of corporate manslaughter,95 to act as a stand-alone provision for prosecuting organisations and to complement offences primarily aimed at individuals. Under this Act an offence is committed: (a) where the way in which an organisation’s activities are managed or organised causes a person’s death; and (b) which amounts to a gross breach of the duty of care owed by that organisation.96 The organisations to which this Act applies are: (1) a corporation; (2) a body listed in Schedule 1 to the Act which hitherto had been immune, such as a government department; (3) a police force; and (4) a partnership, or a trade union or employers’ association, which is an employer.97 By a curious lacuna no other unincorporated association, such as an unincorporated members’ club, appears in the definition of an organisation. The Secretary of State, however, has the power to extend by order the categories of organisation to which the Act applies.98 Thus a company club in its capacity as employer might encounter

88 See, for example, the case of R  v L  and F  [2008] EWCA (Crim) 1970, discussed in 18.4 concerning the Environment Agency and the prosecution of a golf club. 89 Regulatory Enforcement and Sanctions Act 2008, s 38(1). 90 Ibid, s 37(2) and Sch 6. 91 Ibid, s 42(2). 92 Ibid, s 42(6). 93 Ibid, s 41. 94 Ibid, s 54. 95 To be called corporate homicide in Scotland. 96 Corporate Manslaughter and Corporate Homicide Act 2007, s 1(1). 97 Ibid, s 1(2). 98 Ibid, s 21.

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18.35  The Club’s Responsibility for Crime this Act in relation to the death of an employee which concerned the provision of a safe system of work for that employee. The power has not yet been exercised. 18.35 Serious crime prevention orders A new form of civil injunctive order was created under the Serious Crime Act 2007, called a serious crime prevention order, which is aimed at preventing serious crime. The High Court may make the order if it is satisfied that a person has been involved in serious crime and it has reasonable grounds to believe that the order will protect the public by preventing, restricting or disrupting involvement by that person in serious crime.99 Serious crime is defined in Schedule 1 to the Act and covers obvious offences such as drugs trafficking, armed robbery, prostitution and money laundering, and somewhat less obvious offences such as false accounting under the Theft Act 1968, certain intellectual property offences under the Copyright, Designs and Patents Act 1988 and specified offences under the Salmon and Freshwater Fisheries Act 1975, the Wildlife and Countryside Act  1981 and the Environmental Protection Act  1990. A  person who without reasonable excuse fails to comply with a serious crime prevention order commits an offence.100 A  serious crime prevention order may be made against a body corporate and therefore it may be convicted of the offence.101 If the offence was committed with the consent or connivance of an officer of the body corporate, he too may be convicted of the offence.102 In relation to unincorporated associations, a serious prevention crime order must be made in the name of the association and not in that of any of its members.103 The order will continue in force even if the membership changes, unless all the persons who were members at the date of the order leave the association, at which point in time the order ceases to have effect.104 If the association is convicted, the fine is to be paid out of the association’s funds.105 If the offence was committed with the consent or connivance of an officer of the association, he too may be convicted of the offence.106

99 Serious Crime Act 2007, s 1. 100 Ibid, s 25(1). 101 Ibid, s 30(2). 102 Ibid, s 30(2). 103 Ibid, s 32(1). 104 Ibid, s 32(2) 105 Ibid, s 32(6). 106 Ibid, s 32(7).

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Part 4:

Clubs as Parties in Civil Proceedings

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Chapter 19

The Club’s Involvement in Civil Proceedings

1. Introduction 19.1 It will be a fortunate club that can avoid disputes altogether either as claimant or as defendant. Insofar as the law in our society is highly complex, it is recommended that any club involved in a legal dispute would be well advised to consult a solicitor. The purpose of this chapter is to give the Committee of any club an overall picture as to how civil matters are dealt with in our legal system.1 This chapter deals with matters of procedure, not with the substantive matter of any claim or dispute which is dealt with elsewhere in the book. The current rules are the Civil Procedure Rules 1998 (‘CPR’)2 and they govern the practice and procedure in the County Court, the High Court of Justice and the civil division of the Court of Appeal. An important innovation was the introduction of the overriding objective by which the court is enabled to deal with cases justly, that is to say, ensuring that the parties are on an equal footing; saving expense; applying the concept of proportionality; and dealing with the case fairly and expeditiously.3 The parties themselves have a duty to help the court to further the overriding objective.4 In October 2009 the Supreme Court replaced the House of Lords as the highest appellate court in the land.5 19.2 Litigation can be very expensive.6 If the club is involved in any litigation of any substance, whether as claimant or defendant, it is a wise move to call a

1 2

Criminal responsibility is the subject matter of Chapter 18. SI 1998/3132 (followed by numerous amending statutory instruments). As at 2020 some small parts of the Rules of the Supreme Court (RSC) still remain in force. See SI 1998/3132, rule 50(3) and Sch. 1 Part 115. 3 CPR 1.1(1) and (2). 4 CPR 1.3. 5 The High Court of Parliament has existed for hundreds of years, and was abolished as an appellate court in the legal reforms of 1873, hence the High Court of Justice and the Court of Appeal were together described as the Supreme Court. Three years later in 1876 the House of Lords was reinstated as the final appellate court, leaving this (now erroneous) description in place. The creation of a new Supreme Court in 2009 as the highest court in the land reflects better on the constitution as it separates a body with legislative powers from a body with judicial powers. As a consequence the Supreme Court Act 1981 was renamed the Senior Courts Act 1981. 6 Bear in mind the case of Egan v Motor Services (Bath) Ltd [2007] EWCA Civ 1002, where the dispute involved a claim for £6,000 in relation to the purchase of an allegedly defective motor car and where the legal costs of the subsequent litigation ultimately amounted to more than £100,000 (‘completely cuckoo’, said the Court of Appeal).

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19.3  The Club’s Involvement in Civil Proceedings special meeting of the members to obtain their express sanction for the litigation and to confirm that the costs of the litigation shall be borne out of club funds. It is recommended that this procedure should be followed even if the Committee or the trustees, as the case may be, are empowered under the rules, either generally or specifically, to conduct litigation on behalf of the club. If the trustees, the officers of the club or other named members, sue or are sued as individuals representing the club, the special meeting should further confirm that those members will be indemnified out of club funds against all liabilities arising from the proceedings.

2.  Pursuing claims 19.3 The civil courts The civil courts in England and Wales operate under a unified system as a result of the Woolf Reforms in 1999. Civil matters are heard at first instance either in the County Court or in the High Court and they now have concurrent jurisdiction. However, the High Court deals at first instance with cases of high value and high importance, and has a supervisory jurisdiction over all subsidiary courts and tribunals. In the County Court all contested cases are allocated to one of three tracks: (1)

small claims track: claims up to £10,000.7 However, the normal limit in this track in respect of personal injury claims for pain, suffering and loss of amenity is £1,000;8

(2)

fast track: broadly speaking, claims between £10,000 and £25,000 with a trial not exceeding one day;9

(3)

multi-track: claims over £25,00010 or for lesser money claims where the case is considered complex or important.11 A claim for personal injuries must not be started in the High Court unless the value of the claim is £50,000 or more.12 On the other hand, claims which exceed £100,000 will generally be brought in the High Court.13

Some claims must be brought in the County Court, eg claims under the Consumer Credit Act 1974.14 Other claims, eg libel and slander, must be brought in the High Court.15 A wide range of civil disputes is also determined by various tribunals, such as employment tribunals, which have their own rules of procedure and which do not form part of this chapter. 19.4 Pre-action conduct and protocol Litigation should be a last resort, and parties should consider whether negotiation or some other form of alternative dispute resolution (‘ADR’) might enable them to settle their dispute without

7 CPR 26.6(1)(a)(i). 8 CPR 26.6(1)(a)(ii) and (2). 9 CPR 26.6 (4)(b)(i) and 5(a). 10 CPR 26.6(6). 11 CPR 26.8(1). 12 CPR PD 7A, para 2.2. Personal injuries here include disease, impairment of physical and mental condition, and death: see the High Court and County Courts Jurisdiction Order 1991, SI 1991/724, article 5(2), as amended. 13 CPR PD 29, para 2.2. 14 CPR PD 7B, para 4.1. 15 Unless the parties have otherwise agreed in writing: CPR PD 7A, para 2.9.

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Pursuing claims 19.5 commencing legal proceedings.16 There are currently 13 protocols in force which explain the conduct and set out the steps the court would normally expect parties to take before commencing proceedings.17 The ones which may be relevant to clubs in the ordinary course of events are Personal Injury; Construction and Engineering; Defamation; Disease and Illness; Dilapidation of Commercial Property; Low Value Personal Injury Road Traffic Accident Claims; and Low Value Personal Injury Employers’ and Public Liability Claims.18 If no protocol applies, the court will expect the parties to have exchanged sufficient information to:19 (1)

understand each other’s position;

(2)

make decisions how to proceed;

(3)

try to settle the issues without proceedings;

(4)

consider a form of ADR;

(5)

support efficient management of those proceedings;

(6)

reduce the costs of resolving the dispute.

19.5 Service of claim documents New rules of service were introduced in 2008.20 In most cases the only document which must be served on the defendant is the claim form itself (form N1).21 If practicable, the Particulars of Claim should be set out in the claim form22. Otherwise it must be served as a separate document within 14 days after serving the claim form,23 and in any event no later than the latest time for serving the claim form.24 A  response pack must accompany the Particulars of Claim.25 The claimant may either serve the claim form himself or he will ask the court to do this for him.26 If the former procedure is adopted by a club, this will normally be carried out by the club’s solicitor, and is preferable to service by the court in that the solicitor can take advantage of wider methods of service than those used by the court service.27 The claim form should be served on the defendant personally28 except where the defendant has nominated a solicitor to accept service on his behalf.29 The claim form must be served before midnight on the calendar day four months after the issue of the same.30 Where the claimant serves the claim form, he must file a certificate of service (Form N215) within 21 days of service of the Particulars of Claim, unless all the defendants have filed acknowledgments of service within that time.31 The court has power to cure a procedural defect in service, eg an attempt to serve the document at the wrong address.32 16 PD – Pre-action Conduct and Protocols, para 8. 17 Ibid, para 1. 18 Ibid, para 18. 19 Ibid, para 3. 20 CPR Part 6 with associated practice directions, PD 6A and PD 6B. 21 Blackstone’s Civil Practice 2020 at 23.4. 22 CPR PD 16, para 3.1. 23 CPR.7.4(1)(b). 24 CPR 7.4(2). 25 CPR 7.8. 26 CPR 6.4(1)–(2). 27 Blackstone’s Civil Practice 2020 at 15.7. 28 CPR 6.5(1); and see Ener-G Holdings plc v Hormell [2012] EWCA Civ 1059. 29 CPR 6.7(1)(b). 30 CPR 7.5(1). 31 CPR 6.17(2)(a). 32 CPR 3.10.

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19.6  The Club’s Involvement in Civil Proceedings 19.6 Simple claims For a club which has a corporate personality and which wishes to bring a money claim or a possession claim against someone without using a lawyer, it should contemplate using one of the online services provided by HM Courts & Tribunals Service.33 This can be a simple, convenient and secure way of obtaining a judgment or possession on a claim. Because of the more complex nature of representative actions, these procedures are probably not suitable for unincorporated members’ clubs.

3.  Club’s procedure on a claim 19.7 Unincorporated members’ club Proceedings cannot be brought in the name of the club because it is not a legal person.34 The action must therefore be brought either in the names of the individual members on the basis of their personal rights (where they exist) or in the name of one or more members as representing all or some relevant part of the membership such as the managing committee. 19.8 Representative action This is governed by CPR 19.6. Where more than one person has the same interest therein, the claim may be begun, or the court may order its continuance, by one or more of those persons as representatives of all those other persons.35 In club cases it is usual for one or more of the important officers to perform the representative role. The words, ‘the same interest in a claim’, appearing in CPR 19.6(1) are to be construed so as to give effect to the overriding objective of the CPR. In National Bank of Greece SA v Outhwaite 317 Syndicate at Lloyd’s36 it was held that it was proper to bring proceedings against one individual as representative of all members of the 39 Lloyd’s syndicates which had subscribed to a particular insurance policy, even though the selected individual was only a member of one of the syndicates, there being no leading underwriter clause in the policy. Had the situation been reversed, namely, had the Outhwaite 317 Syndicate been suing the National Bank of Greece, the same principle would have applied. Further, it is no bar to a representative action that the exact natures of the interest represented differ somewhat; the procedural rule is not to be treated as a rigid matter of principle but as a flexible tool of convenience in the administration of justice.37 19.9 It is not possible for the sake of convenience for a club to name any individual or individuals it chooses as representing the club in an action which the club intends to bring. The persons must be properly selected and then properly described in the claim form.38 For example, on the basis that Mr Davey was the

33 See Money Claim Online (see www.moneyclaim.gov.uk) or Possession Claim Online (see www.possessionclaim.gov.uk) which is run as a government service on the website. There are also pilot schemes running until 30 November 2021 to streamline the online process (see CPR PD 51R, para 2 and CPR PD 51S, para 2). There is also a current pilot scheme for electronic working set out in CPR PD 51O and running until 6 April 2021. 34 London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15. 35 See Milharbour Management Ltd v Weston Homes Ltd [2011] EWHC 661 (TCC). 36 [2001] Lloyd’s Rep IR 652. 37 John v Rees [1970] Ch 345, at 370 (Megarry J) (where there was a clear common interest between all the club members in having the issue resolved, but the members themselves were far from united in the way they wished it to be resolved). 38 Adams v Naylor [1946] AC 543.

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Club’s procedure on a claim 19.12 chairman of the club, Mr Whiddon was its secretary and Mr Hawke was its treasurer, the form should state ‘Peter Davey, Daniel Whiddon and Harry Hawke as representing themselves and all other members of the Basset Pony Club’. Any exception must be explicitly spelled out. So that if the committee on behalf of the club was bringing an action against Tom Pearce, who was a club member, for defective saddlery supplied to the club the claim form should read, ‘Peter Davey, Daniel Whiddon and Harry Hawke as representing themselves and all other members of the Basset Pony Club except the Defendant herein [Tom Pearce]’.39 The claimant does not need to obtain the court’s permission to issue a claim form as a representative of other claimants, but the court retains a power to order that a particular person may not act as a representative.40 A person suing in a representative capacity does not need to obtain the consent of those he is authorised to represent,41 even though they will be bound by the result of the case. In a club where the members have put the control of the club’s affairs into the hands of a managing committee, the members as a whole are thereby impliedly giving their consent to the Committee bringing a representative action on behalf of the club and this implied consent will override the opposition of individual members. 19.10 The representative claimant is fully empowered to choose how to run the litigation on behalf of the class.42 The represented persons are not parties to the litigation so that, for example, disclosure of documents can only be ordered against them as non-parties under CPR 31.1743 and the represented parties are not liable for costs.44 If a claim is brought by a representative or continued by court order, any judgment or order given in the claim is binding on all persons represented, unless the court directs otherwise.45 However, the judgment or order cannot be enforced by a person who is not a party unless the court gives permission.46 19.11 Trustees If the property of the club is vested in trustees and the claim touches or concerns this property, it may be brought by the trustees acting on behalf of all the members of the club under CPR 19.7A(1). Where such proceedings are brought by trustees, it is not necessary to join the club members as persons having a beneficial interest. The trustees automatically represent this class of person, and the beneficiaries will be bound by any judgment or order given or made in the claim, unless the court orders otherwise in the same or some other proceedings.47 19.12 Literary and scientific institution If unincorporated, the position is governed by section 21 of the Literary and Scientific Institutions Act 1854.48 The institution can sue in the name of the president, chairman, principal secretary or clerk, as determined by the institute’s rules and regulations. In default of such determination the governing body shall appoint an appropriate person to sue on

39 Harrison v Abergavenny [1887] 3 TLR 324 Woodford v Smith [1971] 1 WLR 806, at 810–811 (Megarry J). 40 CPR 19.6(2). 41 CPR 19.6(1) and (4) as applied in Howells v Dominion Insurance Co Ltd [2005] EWHC 552 (QB), at [36] (Cox J). 42 Blackstone’s Civil Practice 2020 at 14.63. 43 Ventouris v Mountain (The Italia Express) (No 1) [1991] 1 WLR 607. 44 Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021, at 1039. 45 CPR 19.6(4)(a); Chandra v Mayor [2016] EWHC 2636 (Ch). 46 CPR 19.6(4)(b). 47 CPR 19.7A(2). 48 See Appendix A.

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19.13  The Club’s Involvement in Civil Proceedings behalf of the institution. If incorporated, the position will be the same as for a company club (see 19.15).49 19.13 Working men’s club The club cannot bring a claim in its own name if it is an unincorporated members’ club. However, under the Friendly Societies Acts the appointment of officers and trustees of the club is a mandatory provision of the rules.50 The trustees of the club, or any officers authorised by the rules, may bring, or may cause to be brought, any action or other legal proceedings in any court ‘touching or concerning any property, right or claim’ belonging to the club; and they may sue in their proper names without any other description than the title of their office.51 Legal proceedings shall not abate or be discontinued by the death, resignation or removal from office of any officer.52 Where proceedings are to be taken against a trustee of the club, the other trustees of the club may bring the requisite proceedings in their name.53 If the club has no solicitor acting for it, the club should give as its address for service of documents the place where it carries on its activities or, if it has no such place, the address of one of the trustees.54 19.14 Community club The club is a body corporate and may sue in its own name in respect of any claim it may wish to bring.55 If the club has no solicitor acting for it, the club should give as its address for service of documents the place where it carries on its activities56 or, if it has no such place, the address of some person holding a senior position within the club such as the president, chairman, treasurer or secretary.57 19.15 Company club The club is a body corporate58 and may sue in its own name in respect of any claim it may wish to bring. If the club has no solicitor acting for it, the club should give as its address for service of documents the place where it carries on its activities59 or, if it has no such place, the address of some person holding a senior position within the company such as a director, manager or other officer of the company.60 As an alternative the company can nominate its registered office under the Companies Act.61 19.16 Community interest company For the purposes of litigation the CIC is classed as an ‘ordinary’ limited company governed by the Companies Act 2006 and may sue in its own name (see 19.15). 19.17 Charitable club If the club is an unincorporated charity, proceedings may be brought in the name of an officer of the club or, if appropriate, in the name of its trustees. If the club is a charity and a body corporate of some description, it may sue

49 The opening words of s 21 concerning those incorporated institutions not entitled to sue can now be disregarded in the light of the Interpretation Act 1978, s 5 and Sch 1. 50 Friendly Societies Act 1974, s 7(2) and Sch 2, para 5. 51 Ibid, s 103(1). 52 Ibid, s 103(3). 53 Ibid, s 103(7). 54 CPR 6.9. 55 Co-operative and Community Benefit Societies Act 2014, s 3(3). 56 CPR 6.9. 57 CPR 6.5(3) and PD 6, paras 6.1 and 6.2. 58 Companies Act 2006, s 16(3). 59 CPR 6.5(2) and 6.6. 60 CPR 6.3 (2) and PD 6, paras 6.1 and 6.2. 61 CPR 6. 5(3)(b), 6.9(2) and Companies Act 2006, s 1139(1).

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Defending claims 19.20 a party in its own name62. This latter category includes the Association charitable incorporated organisation (CIO).63 Before beginning the proceedings, the trustees would be wise to apply to the court in separate proceedings for directions in the form of a ‘Beddoe order’.64 However, special provisions may apply. No ‘charity proceedings’ (that is, proceedings with respect to the internal administration of the trust of the charity)65 shall be ‘entertained or proceeded with’ (that is, taken or defended66) in any court in England or Wales unless authorised by the Charity Commission67 and no authority will be given where in its opinion the case can be dealt with by the Commission under the powers of the Charities Act  2011.68 If the Commission refuses to give its authority, leave to take proceedings may be obtained from a judge of the Chancery Division of the High Court.69 19.18 Community amateur sports club Insofar as this club is either an unincorporated members’ club or an incorporated club, what is said in 19.7–19.11 or in 19.15 will apply. 19.19 Proprietary club Any claim against a third party concerning the club’s affairs will be brought by the proprietor and will be of no concern to the members. If unincorporated, the proprietor should sue in his own name70 or, if incorporated, should sue in the club’s corporate name.

4.  Defending claims 19.20 When the Particulars of Claim are served on a defendant, the included response pack (Form N9) will contain a form for acknowledging service of the claim.71 The general rule is that a defence must be filed within 14 days after service of the Particulars of Claim.72 Therefore no defence need be filed where a claim form does not include, or is not later accompanied by, the Particulars of Claim.73 The defendant is allowed an additional 14 days for filing the defence simply by filing the acknowledgment of service form included in the response pack.74 The defendant and the claimant may agree that the period for filing a defence shall be extended by up to 28 days.75 Where this is done, the defendant must notify the court in writing.76 Any party wishing to have a further extension of time (whether by consent or otherwise) must make an application to the court.77 62 Blackstone’s Civil Practice 2020 at 14.36. 63 See Appendix K for the Association model constitution. 64 See Re Beddoe [1893] 1 Ch 547, CA as explained in Alsop Wilkinson (a firm) v Neary [1996] 1 WLR 1220 (Lightman J). 65 Charities Act 2011, s  115(8). The Charities Act 2011 consolidated the various pieces of legislation on charities into a single Act of Parliament. It did not change the existing law. 66 See Charities and Litigation: a Guide for Trustees published by the Charity Commission on 3 August 2016. 67 Charities Act 2011, s 115(2); Muman v Nagasena [2000] 1 WLR 299, CA. 68 Ibid, s 115(3). 69 Ibid, s 115(5). 70 Firmin and Sons Ltd v International Club (1889) 5 TLR 694. 71 CPR 7.8(1). 72 CPR 15.4(1)(a). 73 Blackstone’s Civil Practice 2020 at 26.3. 74 CPR 15.4(1)(b). 75 CPR 15.5(1). 76 CPR 15.5(2). 77 CPR 3.1(2)(a).

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19.21  The Club’s Involvement in Civil Proceedings 19.21 The claim form is required to contain a statement of value, unless the claimant cannot give this figure.78 If this value is disputed, the defendant must state in the defence why he disputes it and give his own value of the claim, if he can.79 A defence must also say which of the allegations in the Particulars of Claim are admitted; which are denied; and which the defendant requires the claimant to prove.80 If a defendant is defending in a representative capacity, he must state this fact in the defence.81 A  defendant who relies on the expiry of any limitation period must give in his defence details of the date on which it is alleged that the relevant limitation period expired.82 A defendant who wishes to rely on a defence of set-off may include this element in the defence.83 And provided that it is filed at the same time as the defence, a defendant may make a counterclaim against the claimant.84 (Permission is required for filing a counterclaim after service of the defence).85

5.  Club’s procedure on a defence 19.22 Unincorporated members’ club The club itself cannot be sued because it is not a legal person.86 The courts will, however, on occasion if necessary permit an unincorporated association to be joined as a defendant if it is a ‘sufficiently identifiable group’87 but this comes with the all-important caveat expressed by Mr Justice Gross in EDO MBM Technology Ltd v Campaign to Smash EDO:88 ‘Immensely attractive though it is to resolve problems of identification of individuals by way of joining unincorporated associations into legal proceedings, it is not possible to do so unless, at the least, there are before the Court individuals capable of being sued as representatives of the association in question.’ 19.23 Acknowledgment of service Despite the radical overhaul of the procedural rules in 1999, the present position as far as unincorporated members’ clubs are concerned remains unsatisfactory. Currently (2020) CPR Part 6 deals with the service of the claim form and CPR Part 10 deals with the acknowledgment of service of that form. The acknowledgment is a very important document because the failure to file it may result in a default judgment against the person being sued.89 What the rules omit is any provision dealing with service on unincorporated 78 CPR 16.3. 79 CPR 16.5(6). 80 CPR 16.5(1). 81 CPR 16.5(7). 82 CPR PD 16, para 13.1. 83 CPR 16.6. 84 CPR 20.4(2)(a). 85 CPR 20.4(2)(b). 86 John v Rees [1970] Ch  345, at 398 (Megarry J); SmithKline Beecham plc v Avery [2007] EWHC 948 (QB), at [33] (Teare J). 87 Huntingdon Life Sciences Group plc v Stop Huntingdon Animal Cruelty [2005] EWHC 2233 (QB), at [27] (Gibbs J). 88 [2005] EWHC 837 (QB), at [43]. The legal position, however, remains anomalous. 89 CPR 10.2.

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Club’s procedure on a defence 19.25 associations (except partnerships) and what to do if the claim form is not capable of being responded to. In the elderly 1999 edition of the Supreme Court Practice there appeared the currently helpful note:90 ‘Unincorporated club. If sued in the name of the club, acknowledgment of service may be given for the members of the committee as such, but a members’ club cannot acknowledge service in the club’s name, and should not be so sued’. What happens, however, if the local wine merchant does issue a claim form against ‘the Basset Social Club’, an unincorporated members’ club, for goods sold and delivered? Such a claim form will be wholly irregular in that the claimant has sued a non-existent person but it is not a nullity and so is capable of amendment to join a proper party.91 Thus it would not be a wise move to ignore the claim form, except perhaps where the limitation period was about to expire. The better way forward is to serve, using Form N9, an acknowledgment of service saying, ‘The Basset Social Club is an unincorporated members’ club and should not have been sued. This acknowledgment of service is filed by Peter Davey, Daniel Whiddon and Harry Hawke for and on behalf of the committee of the Basset Social Club. We do not propose to take any further step in this action until the defendant has been properly identified.’ 19.24 If the defects in the claim form are less serious, for example, the claimant had misspelled Mr Davey’s name or Mr Whiddon was no longer a member of the club and had been replaced on the Committee by Mr Brewer, but otherwise the claim form was correctly suing committee members of the club, the club should deal with the problem under CPR  PD10, para  5.2. In the acknowledgment of service the club should state the correct name of the defendants followed by their incorrect names: ‘Peter Davey, Bill Brewer and Harry Hawke for and on behalf of the committee of the Basset Social Club, incorrectly described in the claim form as Peter Davy, Daniel Whiddon and Harry Hawke’. Then it will be up to the claimant to amend his claim form (normally at his expense) so that the proper defendants are before the court. 19.25 Representative defence It is essential for an unincorporated members’ club to ensure that, when sued, the right persons have been joined as defendants to any action either personally or in a representative capacity92. CPR 19.6 applies equally to proceedings brought against the club as proceedings brought by the club. Suppose the claim against the club is for damages for noise nuisance caused by the club members on six consecutive Saturday nights. It will be no good for the claimant to describe the defendants as ‘all the members of the Basset Social Club’ since this is too vague and, anyway, some of the members may have joined the club after the six Saturdays in question. Nor is it good enough to describe the defendants as ‘Some of the members of the Basset Social Club’ because, once again, this is too vague a description.93 The solution is for the class of defendants to be defined by reference to the date (or dates) on which the cause of action arose, as happened in the case of Campbell v Thompson94 where the court ordered the writ to be amended so that the defendants were described as ‘HR Thompson and

90 Vol 1, para 12/L/2, p 135. 91 Hibernian Dance Club v Murray [1997] PIQR P46, CA. 92 See SmithKline Beecham plc v Avery [2007] EWHC 948 (QB), at [34]–[36]. 93 Markt & Co Ltd v Knight SS Co Ltd [1910] 2 KB 1021, CA. 94 [1953] 1 WLR 656.

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19.26  The Club’s Involvement in Civil Proceedings CG Surtees Shill on their own behalf and on behalf of all the other members of the City Livery Club on June 29, 1949’, which was the date of the alleged accident.95 19.26 Or take another example. Suppose a claim against the Basset Social Club is made by the local wine merchant for the price of goods sold and delivered pursuant to an order given by the club secretary, Daniel Whiddon. The claim might be framed against the secretary that he was personally liable. His defence might be that he was simply acting as the disclosed agent of the Committee and therefore was not personally liable. So it is likely that the claim form would cite the defendant as being ‘Daniel Whiddon on his own behalf and/or on behalf of all the committee members of the Basset Social Club’. But this description might be inaccurate if the goods had been sold before some of the members had joined the Committee.96 So it might be necessary to describe the defendant with reference to the date of the order, namely, ‘Daniel Whiddon on his own behalf and/or on behalf of all the committee members of the Basset Social Club as at 15 March 2019’. 19.27 Further, any person wrongly sued in a representative capacity may apply to the court for a direction that he is not to act as a representative.97 On the other hand, the claimant does not need the permission of the court to bring an action against named defendants as representatives98 and, indeed, people can be appointed against their own will to defend on behalf of others.99 19.28 Enforcement of judgment in representative action The enforcement provisions in a representative action are set out in CPR 19.6(4), which states: ‘Unless the court otherwise directs, any judgment or order given in a claim in which a party is acting as a representative under this rule: (a)

is binding on all persons represented in the claim; but

(b) may only be enforced by or against a person who is not a party to the claim with the permission of the court.’ What needs to be stated here is that under the former Rules of the Supreme Court100 the member of a club, who was a non-party but represented in the action, was entitled as of right to dispute his liability when it came to enforcement against himself. This is no longer the case. The represented member now has to rely on the discretion of the court in opposing enforcement, although such a person should be afforded the opportunity to make representations before any enforcement of the court order takes place.101 This means that the club should take especial care in

95 This was, unusually, a personal injury action against all the members of an unincorporated members’ club: see 5.65. See also Irish Shipping  Ltd v Commercial Assurance  plc [1991] 2 QB 206, CA (plaintiff permitted to sue two insurers as representing 77 insurers involving 77 separate but identical contracts of marine insurance but with differing proportions of liability for each insurer). 96 See Roche v Sherrington [1982] 1 WLR 599. 97 CPR 19.6(2) and (3). 98 Andrews v Salmon (1888) WN 102 (Kay J) (where the plaintiff had been expelled from the Randolph Churchill Conservative Club in Wanstead and without their consent he brought an action against the chairman of the committee and the hon. secretary as representing all the members of the club; and this procedure was upheld by the court). 99 Wood v McCarthy [1893] 1 QB 775. 100 RSC Ord 15, r 12(5). 101 SmithKline Beecham plc v Avery [2007] EWHC 948 (QB), at [34] (Teare J).

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Club’s procedure on a defence 19.32 ensuring that in defending representative proceedings the defendants in the action are precisely and accurately defined as to whom is being represented. 19.29 The case of Howells v Dominion Insurance  Co  Ltd102 is a good illustration in point. The Hemel Hempstead Football and Sports Club, an unincorporated members’ club, took out an insurance policy where the insured persons were all the members of the club. There was a serious fire at the club and the club claimed under the policy, and the insurers made interim payments of some £52,000. The insurers then repudiated the policy on the ground of material non-disclosure. Mr Howells, the chairman, and Mr Kelly, the secretary, in a representative action on behalf of all the members sued the insurers for a declaration that the policy was valid, and the insurers counterclaimed for the return of the interim payments. At the trial the club lost on its claim and the insurers won on its counterclaim. The insurers later sought to enforce its judgment against all the members. The members sought to avoid enforcement on the ground that their liability was limited to their subscriptions.103 Mrs Justice Cox rejected this argument because this was not a case of the members being liable for the club’s debt but a situation where all the members were party to the contract of insurance. She thus remitted the case to the Master for him to consider whether or not, in the exercise of his discretion, to enforce the judgment against individual members having regard to whatever special circumstances might exist in relation to each of them.104 19.30 Enforcement of costs orders In appropriate circumstances it may be possible for a costs order to be enforced against the bank account standing in the name of an unincorporated members’ club. However, in Huntingdon Life Sciences Group plc v Stop Huntingdon Animal Cruelty105 Mr Justice Mackay allowed the claimant to enforce a costs order against the bank account of the eleventh defendant, London Animal Action, an unincorporated association, without indentifying or naming any individual member of the association connected with the account, whereas permission had previously been given by the same judge to enforce the court orders against the members of the association, but not against the association itself.106 This may therefore be regarded as a rather surprising decision. On the other hand, it is still good law that in a representative action the represented parties, not being parties to the action, are not individually liable for the costs of the action.107 In exceptional circumstances costs may be awarded against nonparties.108 19.31 Trustees What is said in 19.11 applies equally to the situation where claims are brought against trustees. 19.32 Literary and scientific institution If unincorporated, the position is governed by section 21 of the Literary and Scientific Institutions Act 1854.109 The same provisions which apply for suing apply equally where the institution is being

102 [2005] EWCA 552 (QB). 103 See Wise v Perpetual Trustee Co [1903] AC 139, PC, at 149. 104 Ibid, at [40]. 105 [2005] EWHC 2233 (QB). 106 Ibid, at [3]. 107 See Blackstone’s Civil Practice 2020 at 14.63; Moon v Atherton [1972] 2 QB 435, CA, at 441; Howells v Dominion Insurance Co Ltd [2005] EWCA 552 (QB), at [39]. 108 See Howells case at [39]. 109 See Appendix A.

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19.33  The Club’s Involvement in Civil Proceedings sued: see 19.12. In addition, if the claimant applies to the institution for a person to be nominated as defendant to his claim and the institution fails to make any such nomination, the claimant will be entitled to sue the president or the chairman as representing the institution. If a claimant obtains judgment against the person named as the defendant on behalf of the institution, its enforcement shall not be made against that person but only against the property of the institution. If incorporated, the position will be the same as for a company club (see 19.35).110 19.33 Working men’s club The position is governed by section 103(1) of the Friendly Societies Act 1974. The same provisions which apply for suing apply equally where the club is being sued: see 19.13. 19.34 Community club The club is a body corporate111 and should be sued in its own name. 19.35 Company club The club is a body corporate112 and should be sued in its own name. 19.36 Community interest company For the purposes of litigation the CIC is classed as an ‘ordinary’ limited company governed by the Companies Act 2006 and should be sued in its own name (see 19.35). 19.37 Charitable club If the club is an unincorporated charity, proceedings may be brought against it by suing an officer of the charity, for example, ‘the President of the Basset Orphan Fund’,113 or alternatively the charity’s trustees may be named as parties.114 Otherwise, what is said in 19.17 with regard to bringing claims applies equally to defending claims. 19.38 Community amateur sports club Insofar as this club is either an unincorporated members’ club or an incorporated club, what is said in 19.22– 19.31 or 19.35 will apply. 19.39 Proprietary club In any matter concerning the club’s affairs, the claimant will proceed against the proprietor, whether he is an individual or it is a company, and it is the proprietor who has the burden of defending the claim and meeting any liability as a result of such claim.

6. Limitation 19.40 At common law there was no time limit on bringing a claim against another person, and for public policy reasons the ability to bring an action has for several centuries been regulated by statute. The principal Act now in force is the Limitation Act 1980.115 Deciding on a period of limitation is by definition an 110 The opening words of s 21 concerning incorporated institutions not entitled to be sued can now be disregarded in the light of Companies Act 2006, s 16(3). 111 Co-operative and Community Benefit Societies Act 2014, s 3(3). 112 Companies Act 2006, s 16(3). 113 See Blackstone’s Civil Practice 2020 at 14.36. 114 Muman v Nagasena [2000] 1 WLR 299, CA. 115 The 1980 Act consolidated the Limitation Acts of 1939, 1963, 1975 and the Limitation Amendment Act 1980.

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Limitation 19.42 arbitrary process, so what counts is not the spirit of the law but the letter of the law. This topic is therefore replete with legal learning and decided cases on the various issues which have arisen over the years. What follows is necessarily a very brief outline of the law relating to limitation. 19.41 As with its predecessors, the 1980 Act mostly bars the remedy, not the substantive right,116 so that any limitation defence under this Act must be expressly pleaded. Limitation is calculated from the date on which the cause of action was accrued or by which the application should be made: (1)

three-month limit: application for unfair dismissal;117 application for judicial review;118

(2)

one-year limit: action for libel, slander and malicious falsehood;119 action for late payment of insurance claim;120

(3)

three-year limit: action for personal injury claims;121

(4)

six-year limit: most actions founded on tort122 and contract (which includes wrongful dismissal)123; action under the Defective Premises Act 1967124; action to recover arrears of rent;125

(5)

12-year limit: action upon specialties126; action to recover land;127

(6)

no time limit: action based on fraud, concealment or mistake.128

19.42 Extension of time limits The 1980 Act also provides for the extension and exclusion of certain periods of limitation. Where the claimant was under a disability at the time when the cause of action accrued, ie was a minor or of unsound mind, the action may be brought at any time before the expiration of six years from the date when he ceased to be under a disability or died (whichever first occurred), notwithstanding that the ordinary period of limitation has expired.129 Where the action is based on the fraud of the defendant130 or where any fact relevant to the claimant’s right of action has been deliberately concealed by the defendant,131 the period of limitation does not begin to run until the claimant has discovered

116 See 28 Halsbury’s Laws (4th edn, reissue) 856. In civil law jurisdictions it is normally the right which is extinguished. 117 See 16.53. 118 See 14.13. 119 Limitation Act 1980, s 4A. 120 Ibid, s 5A. 121 Ibid, ss 11 and 11A(4)–(7). 122 Ibid, s 2, but note the special time limit in the case of theft (s 4). 123 Ibid, s  5, but note the special time limit for actions in respect of certain loans (s  6). In particular, where money is repayable on demand, the limitation period will not begin to run in favour of the borrower until the lender has made a written demand for repayment. 124 See 15.30. 125 Limitation Act 1980, s 19. 126 Ibid, s  8. A  specialty is a signed contract contained in a deed. The additional need for sealing was abolished by the Law of Property (Miscellaneous Provisions) Act 1989, s 1. 127 Limitation Act 1980, s 15. 128 Ibid, s 32. 129 Ibid, ss  28 and 28A. See, eg  Headford v Bristol and District Health Authority [1995] PIQR P180 CA (where the action was brought 28 years after the events complained of). 130 Limitation Act 1980, s 32(1)(a). 131 Ibid, s 32(1)(b).

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19.43  The Club’s Involvement in Civil Proceedings the fraud or concealment or could have done so with reasonable diligence.132 The court also has the discretion to exclude the time limit for libel, slander and malicious falsehood133 and the time limit for actions in respect of personal injuries and death.134 The Latent Damage Act 1986 inserted new sections 14A and 14B into the Limitation Act 1980 under which special time limits were introduced for actions for damages in the tort of negligence (other than actions for personal injuries) where the facts relevant to the cause of action were not known at the date when the cause of action accrued, subject to an overriding time limit of 15 years.135

7.  Alternative dispute resolution 19.43 Introduction Civil litigation is expensive. It is time-consuming for lawyers to investigate a dispute before proceedings are issued and thereafter to prepare for the trial once they are issued. And time costs money. On the other hand, we live in a complex society and acting as one’s own lawyer is often an unwise activity. Despite the advent of the CPR and better case management of litigation by the courts, high costs are endemic in properly conducted litigation.136 Furthermore, litigation takes place in the public domain and for members’ clubs it is often appropriate that clubs should consider ways of resolving disputes privately and confidentially rather than by litigation.137 Indeed, in Halsey v Milton Keynes General NHS  Trust138 the Court of Appeal emphasised that those members of the legal profession who conduct litigation should routinely consider with their clients whether their disputes were suitable for alternative dispute resolution (or ADR as it is commonly called).139 The Court of Appeal did add, however, that the court’s role was to encourage but not to compel the parties to go to ADR.140 All the pre-action protocols have been revised to strengthen the provisions dealing with the consideration of ADR in preference to litigation. What follows is an outline of the types of ADR that are available. It must be remembered, however, that there is no one-size-fits-all solution to the problem of resolving disputes if an alternative is sought to litigation. Every dispute needs to be assessed individually to ascertain the best way forward. A further point to note is that an individual may waive his right of access to the courts under article 6(1) of

132 Limitation Act 1980, s  32(1). The case of Sheldon v RHM  Outhwaite (Underwriting Agencies) Ltd [1996] AC 102 is a classic example of the difficulties in interpreting correctly the provisions of the 1980 Act: see the speech of Lord Nicholls of Birkenhead at 152. 133 Limitation Act 1980, s 32A. 134 Ibid, s 33. 135 See eg Haward v Fawcetts [2006] UKHL 9; Eagle v Redlime Ltd [2011] EWHC 838 (QB) (Eder J). In neither case did the claimant succeed under the extended time limits and Lord Walker in the Haward case at [55] stated, ‘Despite the best efforts of the Law Commission the law in this area still has many problems.’ 136 Lord Justice Jackson delivered in December 2009 his Review of Civil Litigation Costs: Final Report wherein he stated, ‘In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice.’ 137 See 5.101 as regards internal disputes. 138 [2004] EWCA Civ 576. 139 We consider that a more appropriate nomenclature might be private dispute resolution to distinguish it from litigation which is controlled publicly by the state. 140 Halsey at [11]. However, in Wright v Michael Wright Supplies Ltd [2013] EWCA Civ 234 Ward LJ (who sat on the appeal in Halsey in 2004) expressed at [3] his doubt whether Halsey was correctly decided.

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Alternative dispute resolution 19.45 the European Convention on Human Rights141 by entering into a contract in which he agrees to submit disputes to arbitration.142 19.44 Arbitration Almost any dispute that can be resolved by litigation can be settled by arbitration. Arbitration was practised in classical times.143 Domestic arbitration is now governed by the Arbitration Act 1996. The arbitrator’s decision is final and legally binding. There is very little scope for appealing to the court. The process is confidential, and is generally more flexible and simpler than litigation and contains a power to cap costs.144 It can in suitable cases be conducted on documents only. One downside is that no third party procedure is available so that, for example, if pursuant to an arbitration clause  a builder in an arbitration was claiming moneys from a club in respect of additional building works, the club would not be entitled to bring into the arbitration as of right its surveyor or architect as a third party on the ground that it was through their negligence that these additional works were incurred. This is because the tribunal’s jurisdiction derives from the will of the parties to the arbitration and therefore any joinder of or intervention by a third party can only occur with the consent of the existing parties. As to costs generally, they are in the discretion of the arbitrator, subject to any agreement between the parties,145 and as a matter of general principle costs should follow the event.146 The parties are, however, jointly and severally liable to pay the arbitrator’s reasonable fees and expenses.147 19.45 An agreement to arbitrate under the provisions of the Arbitration Act 1996 must be in writing.148 Although arbitration is a consensual process in that parties cannot be compelled to go to arbitration unless they have agreed to resolve their dispute by this means, such process may become compulsory under section 9(4) of the Arbitration Act 1996 where a valid agreement to arbitrate is in existence. Accordingly, if one party to an arbitration agreement brings legal proceedings against another party, that other party can obtain from the court a mandatory stay of the legal proceedings to allow the arbitration to take place.149 For example, in Fulham Football Club (1987) Ltd v Richards150 Fulham presented a petition to the

141 The Human Rights Act 1998 incorporated this Convention into UK domestic law. 142 Deweer v Belgium [1979–1980] EHRR 439, at [49]. See further Alassini v Telecom Italia SpA (C-317/08 and C-320/08) where the European Court of Justice on 18  March 2010 at [67] confirmed the opinion of Advocate General Kokott who stated in her Opinion of 19 November 2009 at [58] that a requirement of an EU Directive for mandatory out-ofcourt dispute resolution before resort to judicial proceedings does not offend against art 6 provided the procedure is transparent, simple and inexpensive; is proportionate; and has a legitimate objective. This would appear to sanction compulsory mediation domestically agreed by the parties or imposed by national law. 143 See, eg Derek Roebuck, Ancient Greek Arbitration (Holo Books, 2001) describing arbitration and mediation from the time of Homer to Cleopatra. 144 Arbitration Act 1996, s 65. 145 Ibid, s 61(1). 146 Ibid, s 61(2). 147 Ibid, s 28(1). 148 Ibid, s  5. It is possible to have a valid oral arbitration agreement at common law (see Arbitration Act 1996, s 81(1)(b)) but it will not be governed by this Act and may lead to difficulties of procedure and enforcement. The answer is to convert the oral agreement into a written one. 149 Arbitration Act 1996, s 9. The procedure for making the application for a stay is set out in CPR  Part  62 and the application should be made to the court dealing with the legal proceedings. 150 [2011] EWCA Civ 855, thereby overruling the earlier decision of Exeter Football Club Ltd v Football Conference Ltd [2004] EWHC 831 (Ch).

417

19.46  The Club’s Involvement in Civil Proceedings court based on ‘unfair prejudice’ under section 994 of the Companies Act 2006 which related to the transfer of Peter Crouch from Portsmouth Football Club to Tottenham Football Club rather than to Fulham. Fulham alleged that the defendant, the Chairman of the Football Association, had acted unfairly to the prejudice of the club. The defendant applied to the court for a stay in favour of arbitration based on the FA  Rules applicable between Fulham and the Football Association Premier League Limited. The Court of Appeal upheld the judge’s stay of execution of the petition on the grounds that there was no statutory restriction or rule of public policy which made the dispute non-arbitrable. Statutory exceptions to the mandatory stay are where the court is satisfied that the arbitration agreement is ‘null and void, inoperative or incapable of being performed’.151 19.46 Mediation Mediation (and conciliation) share many of the characteristics of arbitration and take place where the parties agree to use a neutral person to help solve the dispute. Mediation is a confidential process. The mediator, however, is not a judge or arbitrator but a ‘facilitator’ who helps the parties to reach their own solution. In other words, it is a controlled negotiating process. One of mediation’s crucial ingredients is the mediator’s ability to talk to each side privately (on a strictly confidential basis). Another advantage of mediation is that the parties are looking for a commercial solution rather than deciding precise legal rights and obligations which litigation and arbitration are required to do. A successful facilitative mediation will therefore invariably involve the disputants in a compromise. A  mediation involving a complex set of facts can often be dealt with in one full day’s mediation, and so this procedure has the potential to save great expense in appropriate cases. Mediation can accommodate third party participation if the parties are agreeable to this course. Mediation is not legally binding or enforceable through the courts unless the parties agree to be bound by the decision reached with the mediator. As to costs, if the mediation is successful they will be absorbed into the settlement agreement. If unsuccessful, it is common for each side to agree to bear their own costs and to share the payment of the mediator’s fees and expenses. 19.47 Med-Arb Sometimes a combined mediation and arbitration process takes place. The parties agree to mediate first to see if they can come to some agreed resolution of their dispute. If this does not prove possible, the parties move on to arbitration where a binding decision will be handed down. This process has considerable merit. However, a point of practical difficulty can arise as to whether the same person can be both the mediator and the arbitrator. Mediators very frequently see the parties separately, something which would be wholly irregular in arbitration (or litigation) since it would be a departure from due process or a breach of the rules of natural justice. There is a school of thought that says it is impossible to combine the two roles of mediator and arbitrator in the same dispute. If two separate professionals are involved, however, this inevitably increases the costs of resolving the dispute. A  clear and express agreement between the parties is required if the same person is to act as mediator and then as arbitrator. As to costs, if the mediation is unsuccessful, it is sometimes agreed that each side will bear their own costs in any event and at other times that they will be costs in the arbitration, to be dealt with by the arbitrator, subject in either event to the parties sharing, or sharing initially, the payment of the mediator’s fees and expense.

151 Arbitration Act 1996, s 9(4).

418

Alternative dispute resolution 19.50 19.48 Adjudication Adjudicators too have been around for a long time. They are persons appointed to resolve a dispute with a legally binding decision but in a less formal manner than an arbitrator. For example, complaints by members of friendly societies may be referred to an adjudicator under section 81(1) of the Friendly Societies Act 1992. In the UK adjudication was a process introduced into the construction industry to expedite resolution of disputes where litigation or arbitration traditionally caused extensive delays. There is a statutory right to have a dispute under a construction contract resolved by adjudication152 and this process is governed by Part  II of the Housing Grants, Construction and Regeneration Act  1996 as amended by the Local Democracy, Economic Development and Construction Act 2009. It is intended to provide a swift, summary, interim means of resolving disputes arising under an agreement, whether or not in writing, for example, on the question of contractual payments. The award is binding on the parties until the dispute is finally resolved by litigation or arbitration.153 The parties may, however, agree that the adjudication will be the final process (which they often do, by electing, after the adjudication, not to proceed to litigation or arbitration). To keep the process short and simple no reasons need be given for the adjudication, unless the parties agree that reasons should be given154 (which they often do because it is more likely the parties will accept the outcome as the agreed final process). Each party is jointly and severally liable to the adjudicator for the payment of such reasonable amount as he may determine by way of his fees and expenses, and the adjudicator has power to apportion this payment as between the parties.155 Otherwise the adjudicator has no power to order costs against any party (a welcome situation). However, it should be noted that adjudication is not the subject of appeal unless the adjudicator lacked jurisdiction or there was an argument as to lack of impartiality or natural justice.156 19.49 Expert determination Here the parties agree as a matter of contract that the dispute shall be resolved by an expert, who will almost invariably be an expert in the subject matter of the dispute, and that his decision will be legally binding on both parties. Once again, no reasons are normally given for the determination unless the parties agree that they should be given. This process can in appropriate cases provide a quick and efficacious resolution to the dispute. As to costs, this is a matter for agreement between the parties, but the expert will no doubt seek a prior agreement with the parties that they will be jointly and severally liable for his reasonable fees and expenses. 19.50 Early neutral evaluation This is where an independent neutral person appraises the case and gives an assessment of the parties’ chances of success (an ‘ENE’) if litigation were to be pursued. It has the advantage of giving both parties a realistic assessment of the costs and potential gains from litigation. In Lomax v Lomax,157 a probate case, the Court of Appeal held that under CPR  3.1(2)(m), 152 Housing Grants, Construction and Regeneration Act 1996, s 108(1). 153 RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] EWCA Civ 270; for more detail see The Schedule to the Scheme for Construction Contracts (England and Wales) Regulations  1998, SI  1998/649, as amended by The Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011, SI 2011/2333. 154 The 1998 Schedule, regs 2 and 22. 155 Ibid, reg 11 (as amended). 156 See Coulson on Construction Adjudication (4th edn 2019) para 8.07. 157 [2019] EWCA Civ 1467.

419

19.50  The Club’s Involvement in Civil Proceedings which was introduced on 1 October 2015 with the aim of helping the parties to settle the case, the court has the power to direct an ENE hearing, whether or not a party has consented to such procedure. This evaluation is a confidential process. As to costs, this is a matter for agreement between the parties, but the neutral person will no doubt seek a prior agreement with the parties that they will be jointly and severally liable for his reasonable fees and expenses.

420

Appendices A

Literary and Scientific Institutions Act 1854, sections 18 to 33

423

B

Shop Clubs Act 1902, Schedule

427

C Licensing Act 1964, Schedule 7

429

D Friendly Societies Act 1974, Schedule 2

433

E

Co-operative and Community Benefit Societies 2014, section 14

435

F

Corporate Insolvency and Governance Act 2020, Schedule 14

437

G Model Articles 2008 for private companies limited by shares

441

H Model Articles 2008 for private companies limited by guarantee

461

I

Model Articles for a community interest company limited by guarantee

475

J

Constitution of a charitable incorporated organisation, ‘Association’ model

497

K

Model full set of rules for an unincorporated members’ club (Basset Sports Club)

521

L

Model short-form set of rules for an unincorporated members’ club (Bassetshire Hockey Umpires Association)

539

M Specimen notice and agenda for an AGM (with proxy form) (Basset Historical Society)

545

N Specimen minutes of a committee meeting (Basset Borough Council Standards Committee) 

549

421

Appendix A

Literary and Scientific Institutions Act  1854, sections 18–33

(As amended) 18 Trustees may sell or exchange lands or buildings; or may let If it shall be deemed advisable to sell any land or building not previously part of the possessions of the Duchy of Lancaster or Cornwall held in trust for any institution, or to exchange the same for any other site, the trustees in whom the legal estate in the said land or building shall be vested may, by the direction or with the consent of the governing body of the said institution, if any such there be, sell the said land or building, or part thereof, or exchange the same for other land or building suitable to the purposes of their trust, and receive on any exchange any sum of money by way of effecting an equality, and apply the money arising from such sale or given on such exchange in the purchase of another site, or in the improvement of other premises used or to be used for the purposes of such trust; and such trustees may, with like direction to consent, let portions of the premises belonging to the institution not required for the purposes thereof, for such term, and under such covenants or agreements, as shall be deemed by such governing body to be expedient, and apply the rents thereof to the benefit of the institution. 19 Trustees to be indemnified from charges; in default thereof empowered to mortgage or sell the premises The trustees of such institution who, by reason of their being the legal owner of the building premises, shall become liable to the payment of any rate, tax, charge, costs, or expenses, shall be indemnified and kept harmless by the governing body thereof from the same, and in default of such indemnity shall be entitled to hold the said building or premises and other property vested in them as a security for their reimbursement and indemnification and, if necessity shall arise, may mortgage or sell the same, or part thereof, free from the trust of the institution, and apply the amount obtained by such mortgage or sale to their reimbursement, and the balance (if any) to the benefit of the institution, subject to the restrictions hereinbefore contained with regard to lands given and lands belonging to the Duchies aforesaid. 20 Property of institution, how to be vested Where any institution shall be incorporated, and have no provision applicable to the personal property of such institution, and in all cases where the institution shall 423

Appendix A  Literary and Scientific Institutions Act  1854, sections  18–33 not be incorporated, the money, securities for money, goods, chattels, and personal effects belonging to the said institution, and not vested in trustees, shall be deemed to be vested for the time being in the governing body of such institution, and in all proceedings, civil and criminal, may be described as the monies, securities, goods, chattels, and effects of the governing body of such institution, by their proper title. 21 How suits by and against institutions to be brought Any institution incorporated which shall not be entitled to sue and be sued by any corporate name, and every institution not incorporated, may sue or be sued in the name of the president, chairman, principal secretary, or clerk, as shall be determined by the rules and regulations of the institution, and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion: Provided, that it shall be competent for any person having a claim or demand against the institution to sue the president or chairman thereof, if, on application to the governing body, some other officer or person be not nominated to be the defendant. 22 (repealed) Amendments Repealed by Statute Law (Repeals) Act 1986.

23 How judgment to be enforced against If a judgment shall be recovered against the person or officer named on behalf of the institution, such judgment shall not be put in force against the goods, chattels, or lands, or against the body of such persons or officer, but against the property of the institution shall be issued, setting forth the judgment recovered, the fact of the party against whom it shall have been recovered having sued or having been sued, as the case may be, on behalf of the institution only, and requiring to have the judgment enforced against the property of the institution. Amendments Statute Law (Repeals) Act 1986, s 1(1), Sch 1 Pt 1.

24 Institution may make byelaws to be enforced In any institution the governing body, if not otherwise legally empowered to do so, may, at any meeting specially convened according to its regulations, make any byelaw for the better governance of the institution, its members or officer, and for the furtherance of its purpose and object, and may impose a reasonable pecuniary penalty for the breach thereof, which penalty, when accrued, may be recovered in any local court of the district wherein the defendant shall inhabit or the institution shall be situated, as the governing body thereof shall deem expedient: Provided always, that no pecuniary penalty imposed by any byelaw for the breach thereof shall be recoverable unless the byelaw shall have been confirmed by the votes of three fifths of the members present at a meeting specially convened for the purpose. 25 Members liable to be sued as strangers Any member who may be in arrear of his subscription according to the rules of the institution, or may be or shall possess himself to detain any property of the institution in a manner or for a time contrary to such rules, or shall injure or destroy the property of the institution, may be sued in the manner hereinbefore provided: 424

Literary and Scientific Institutions Act  1854, sections  18–33  Appendix A but if the defendant shall be successful in any action or other proceeding at the instance of the institution, and shall be adjudged to recover his costs, he may elect to proceed to recover the same from the officer in whose name the suit shall be brought, or from the institution, and in the latter case shall have process against the property of the said institution in the manner above described. 26 Members guilty of offences punishable as strangers Any member of the institution who shall wilfully and maliciously, or wilfully and unlawfully, destroy or injure the property of such institution, whereby the funds of the institution may be exposed to loss, shall be subject to the same prosecution, and if convicted shall be liable to be punished in like manner, as any person not a member would be subject and liable to in respect of the like offence. Amendment Larceny Act 1916; Forgery Act 1913.

27 Institution enabled to alter, extend, or abridge their purposes Whenever it shall appear to the governing body of any institution (not having a Royal Charter, nor established nor acting under any Act of Parliament,) which has been established for any particular purpose or purposes that it is advisable to alter, extend, or abridge such purpose, or to amalgamate such institution, either wholly or partially, with any such institution or institutions, such governing body may submit the proposition to their members in a written or printed report, and may convene a special meeting for the consideration thereof according to the regulations of the institution; but no such proposition shall be carried into effect unless such report shall have been delivered or sent by post to every member ten days previous to the special meeting convened by the governing body for the consideration thereof, nor unless such proposition shall have been agreed to by the votes of three-fifths of the members present at such meeting, and confirmed by the votes of three-fifths of the members present at a second special meeting convened by the governing body at an interval of one month after the former meeting. 28 Power to Board of Trade to suspend such alteration, if applied to by two-fifths dissentients If any members of the institution, being not less than two-fifths in number, consider that the proposition so carried is calculated to prove injurious to the institution, they may, within three months after the confirmation thereof, make application in writing to the Lords Committee of her Majesty’s Privy Council for Trade and Foreign Plantations, who, at their discretion, shall entertain the application, and if, after due inquiry, they shall decide that the proposition is then calculated to prove injurious to the institution, the same shall not be then carried into effect; but such decision shall not prevent the members of such institution from reconsidering the same proposition on a future occasion. 29 Provision for the dissolution of institutions and adjustment of their affairs Any number not less than three-fifths of the members of any institution may determine that it shall be dissolved, and thereupon it shall be dissolved forthwith, or at the time then agreed upon, and all necessary steps shall be taken for the disposal and settlement of the property of the institution, its claims and liabilities, 425

Appendix A  Literary and Scientific Institutions Act  1854, sections  18–33 according to the rules of the said institution, applicable thereto, if any, and if not, then as the governing body shall find expedient: Provided, that in the event of any dispute arising among the said governing body, or the members of the institution, the adjustment of its affairs shall be referred to the county court and it shall make such order or orders in the matter as it shall deem requisite, or if it find it necessary, shall direct that proceedings shall be taken in the High Court for the adjustment of the affairs of the institution. Amendment Crime and Courts Act 2013, s 17 and Sch 9(2), para 12(a).

30 Upon a dissolution, no member to receive profit – Proviso for jointstock companies If upon the dissolution of any institution there shall remain, after the satisfaction of all its debts and liabilities, and property whatsoever, the same shall not be paid to or distributed among the members of the said institution or any of them, but shall be given to some other institution, to be determined by the members at the time of the dissolution, or in default thereof by the county court: Provided, however, that this clause shall not apply to any institution which shall have been founded or established by the contributions of shareholders in the nature of a joint stock company. Amendment Crime and Courts Act 2013, s 17 and Sch 9(4), para 141.

31 Who is a member For the purposes of this Act, a member of an institution shall be a person who, having been admitted therein according to the rules and regulations thereof, shall have paid a subscription, or shall have signed the roll or list of members thereof: but in all proceedings under this Act no person shall be entitled to vote or be counted as a member whose current subscription shall be in arrear at the time. 32 The governing body defined The governing body of the institution shall be the council, directors, committee, or other body to whom, by Act of Parliament, charter, or the rules and regulations of the institution, the management of its affairs is entrusted; and if no such body shall have been constituted on the establishment of the institution, it shall be competent for the members thereof, upon due notice, to create for itself a governing body to act for the institution thenceforth. 33 To what institutions the Act shall apply The Act shall apply to every institution for the time being established for the promotion of science, literature, for fine arts, for adult instruction, the diffusion of useful knowledge, the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs: Provided, that the Royal Institution shall be exempt from the operation of this Act. Amendments –Statute Law (Repeals) Act 1973.

426

Appendix B

Shop Clubs Act 1902, Schedule

NOTE – this Act was repealed by the Wages Act 1986 but a few shop clubs may still exist and the Schedule to the 1902 Act does give useful guidance as to what primary rules should be considered Section 3

SCHEDULE Regulations as to certification under this Act The rules of a shop club or thrift fund (herein-after termed ‘the society’) shall provide for the following matters – i.

The name and place of office of the society.

ii. The whole of the objects for which the society is to be established, the purposes for which the funds thereof shall be applicable, the terms of admission of members the conditions under which any member may become entitled to any benefit assured thereby, and the fines and forfeitures to be imposed on any member and the consequences of non-payment of any subscription or fine. iii. The mode of holding meetings and right of voting, and the manner of making, altering and rescinding rules. iv. The appointment and removal of a committee of management (by whatever name), of a treasurer and other officers, and of trustees. v. The investment of the funds, the keeping of the accounts, and the audit of the same once a year at least. vi. Annual returns to the registrar of the receipts, funds, effects and expenditure and numbers of members of the society. vii. The inspection of the books of the society by every person having an interest in the funds of the society. viii. The manner in which disputes shall be settled. ix. The keeping separate accounts of all moneys received or paid on account of every particular fund or benefit assured for which a separate table of contributions payable shall have been adopted, and the keeping separate account of the expenses of management and of all contributions on account thereof. x. A valuation once at least in every five years of the assets and liabilities of the society, including the estimated risks and contributions. 427

Appendix B  Shop Clubs Act 1902, Schedule xi. The voluntary dissolution of the society by consent of not less than five-sixths in value of the persons contributing to the funds of the society, and of every person for the time being entitled to any benefit from the funds of the society, unless his claim be first satisfied or adequately provided for. xii. The right of one-fifth of the total number of members, or of one hundred members in the case of a society of one thousand members and not exceeding ten thousand, or of five hundred members in the case of a society of more than ten thousand members, to apply to the chief registrar, or, in any case of societies registered and doing business exclusively in Scotland or Ireland, to the assistant registrar for Scotland or Ireland, for an investigation of the affairs of the society or for winding up the same.

428

Appendix C

Licensing Act 1964, Schedule 7

NOTE – this Act was repealed by the Licensing Act 2003 but is retained here as it still has some relevance to club law **** Sections 41 and 42

SCHEDULE 7 Provisions as to club rules 1 Management of club The affairs of the club, in matters not reserved for the club in general meeting or otherwise for the decision of the general body of members, must, under the rules, be managed by one or more elective committees; and one committee must be a general committee, charged with the general management of those affairs in matters not assigned to special committees. 2 General meetings (1) There must, under the rules, be a general meeting of the club at least once in every year, and fifteen months must not elapse without a general meeting. (2) The general committee must be capable of summoning a general meeting at any time on reasonable notice. (3) Any members entitled to attend and vote at a general meeting must be capable of summoning one or requiring one to be summoned at any time on reasonable notice, if a specified number of them join to do so, and the number required must not be more than thirty nor more than one-fifth of the total number of the members so entitled. (4) At a general meeting the voting must be confined to members, and all members entitled to use the club premises must be entitled to vote, and must have equal voting rights, except that – (a) the rules may exclude from voting, either generally or on particular matters, members below a specified age (not greater than twenty-one), women if the club is primarily a men’s club, and men if the club is primarily a women’s club, and (b) if the club is primarily a club for persons qualified by service or past service, or by any particular service or past service, in Her Majesty’s forces, the 429

Appendix C  Licensing Act 1964, Schedule 7 rules may exclude persons not qualified from voting, either generally or on particular matters; and (c) if the rules make special provision for family membership or family subscriptions or any similar provision, the rules may exclude from voting, either generally or on particular matters, all or any of the persons taking the benefit of that provision as being members of a person’s family, other than that person. 3 Membership (1) Ordinary members must, under the rules, be elected either by the club in general meeting or by an elective committee, or by an elective committee with other members of the club added to it for the purpose; and the names and address of any person proposed for election must, for not less than two days before the election, be prominently displayed in the club premises or principal club premises in a part frequented by the members. (2) The rules must not make any such provision for the admission of persons to membership otherwise than as ordinary members (or in accordance with the rules required for ordinary members by sub-paragraph (1) of this paragraph) as is likely to result in the number of members so admitted being significant in proportion to the total membership. 4 Meaning of ‘elective committee’ (1) In this Schedule ‘elective committee’ means, subject to the following provisions of this paragraph, a committee consisting of members of the club who are elected to the committee by the club in accordance with sub-paragraph (8) of this paragraph for a period of not less than one year nor more than five years, and paragraph 2(4) of this Schedule shall apply to voting at the election as it applies to voting at general meetings. (2) Elections to the committee must be held annually, and if all the elected members do not go out of office in every year, there must be fixed rules for determining, those that are to; and all members of the club entitled to vote at the election and of not less than two years’ standing, must be equally capable of being elected (subject only to any provision made for nomination by members of the club and to any provision prohibiting or restricting re-election) and, if nomination is required, must have equal rights to nominate persons for election. (3) Except in the case of a committee with less than four members, or of a committee concerned with the purchase for the club or with the supply by the club of intoxicating liquor, a committee of which not less than two-thirds of the members are members of the club elected to the committee in accordance with sub-paragraphs (1) and (2) of this paragraph shall be treated as an elective committee. (4) A sub-committee of an elective committee shall also be treated as an elective committee if its members are appointed by the committee and not less than two-thirds of them (or, in the case of a sub-committee having less than four members, or concerned with the purchase for the club or with the supply by the club of intoxicating liquor, all of them) are members of the committee elected to the committee in accordance with sub-paragraphs (1) and (2) of this paragraph who go out of office in the sub-committee on ceasing to be members of the committee. 430

Licensing Act 1964, Schedule 7  Appendix C (5) For the purposes of this paragraph a person who on a casual vacancy is appointed to fill the place of a member of an elective committee for the remainder of his term and no longer shall, however appointed, be treated as elected in accordance with sub-paragraphs (1) and (2) of this paragraph if the person whose place he fills was so elected or is to be treated as having been so elected.

431

Appendix D

Friendly Societies Act 1974, Schedule 2 **** Section 7(2)

SCHEDULE 2 Matters to be provided for by the rules of societies registered under this act Part I Provisions applicable to all societies 1 The name of the society. 2 The place which is to be the registered office of the society, to which all communications and notices may be addressed. 3 (1) Subject to sub-paragraphs (2) and (3) below, the whole of the objects for which the society is to be established, the purposes for which the funds thereof shall be applicable, the terms of admission of members the conditions under which any member may become entitled to any benefit assured by the society, and forfeitures to be imposed on any member and the consequences of nonpayment of any subscription. (2) Nothing in sub-paragraph (1) above shall require the inclusion in the rules of a registered society of tables relating to the benefits payable to or in respect of any members of the society in pursuance of group insurance business. (3) Nothing in sub-paragraph (1) above shall prevent a registered friendly society from specifying in its rules the manner in which the conditions under which any member may become entitled to any benefit assured by the society are to be determined, instead of specifying the conditions themselves. 4 The mode of holding meetings and right of voting, and the manner of making, altering or rescinding rules. 433

Appendix D  Friendly Societies Act 1974, Schedule 2 5 The appointment and removal of a committee of management (by whatever name), of a treasurer and other officers and of trustees and, in the case of a society with branches, the composition and powers of the central body and the conditions under which a branch may secede from the society. 6 The investment of the funds, the keeping of the accounts and the audit of the accounts at least once a year. 7 Annual returns to the [Financial Conduct] Authority relating to the affairs and numbers of members of the society. 8 The inspection of the books of the society by every person having an interest in the funds of the society. 9 The manner in which disputes shall be settled. 10 In the case of dividing societies, a provision for meeting all claims upon the society existing at the time of division before any such division takes place. 11 (1)

For the avoidance of doubt it is hereby declared that nothing in paragraph 3 above requires the rules of a society to contain tables in accordance with which obligations to provide benefits to members have been undertaken or policies of assurance have been issued by the society, if the rules of the society provide that no further obligations may be undertaken or (as the case may be) no further policies may be issued in accordance with any such tables.

(2)

Subject to sub-paragraph (1) above and sub-paragraph (3) below, the tables which the rules of a registered society are required to contain by virtue of paragraph 3 above and any tables contained in the rules of a branch shall, in the case of a society or branch which proposes to carry on long-term business, be tables which, in so far as they relate to that business, have been certified by a qualified actuary.

(2A) In sub-paragraph (2) ‘long-term business’ has the meaning given by section 117(2) of the Friendly Societies Act 1992. (3)

Sub-paragraph (2) above does not apply: (a)

to a society first registered before 26th July 1968, nor

(b)

to a branch of such a society, nor

(c)

to a society formed by the amalgamation of two or more such societies.

Amendments Paragraph 7 ceased to have effect in relation to registered friendly societies by virtue of Friendly Societies Act 1992, s 95, Sch 16, para 51(2). This exemption would include working men’s clubs.

434

Appendix E

Co-operative and Community Benefit Societies Act 2014, section 14

**** 14  Content of a society’s rules A registered society’s rules must contain provision about the following matters— 1 Name The society’s name (which must comply with section 10). 2 Objects The objects of the society. 3  Registered office The place of the society’s registered office, to which all communications and notices to the society may be addressed. 4 Membership The terms of admission of the members, including any society or company investing funds in the society under the provisions of this Act. 5  Meetings, voting, changes to rules The method of holding meetings, the scale and right of voting, and the method of making, altering or rescinding rules. 6  Committees and officers The appointment and removal of a committee (by whatever name) and of managers or other officers and their respective powers and remuneration. 7  Maximum shareholding Determination in accordance with section 24 of the maximum amount of the interest in the shares of the society which may be held by any member otherwise than by virtue of section 24(2). 8  Borrowing powers etc Determination whether the society may contract loans or receive moneys on deposit subject to the provisions of this Act from members or others, and if so under what conditions, under what security, and to what limits of amount. 435

Appendix E  Co-operative and Community Benefit Societies Act 2014, section 14 9 Shares Determination whether any or all shares are transferable, and provision for the form of transfer and registration of shares, and for the consent of the committee to transfer or registration. Determination whether any or all shares are withdrawable, and provision for the method of withdrawal and for payment of the balance due on them on withdrawing from the society. 10 Audit Provision for the audit of accounts in accordance with Part 7. 11  Withdrawal etc Determination whether members may withdraw from the society and if so how, and provision for the claims of the representatives of deceased members and of the trustees of the property of bankrupt members (or, in Scotland, members whose estates have been sequestrated), and for the payment of nominees. 12  Application of profits The way in which the society’s profits are to be applied. 13 Seal If the society is to have a common seal, provision for its custody and use. 14  Investment of society’s funds Determination whether any part of the society’s funds may be invested, and if so by what authority and in what way.

436

Appendix F

Corporate Insolvency and Governance Act 2020, Schedule 14

(Extract)

SCHEDULE 14 Meetings of Companies and other Bodies 1  Meaning of ‘qualifying body’ In this Schedule ‘qualifying body’ means— … (d) a society that is registered within the meaning of the Friendly Societies Act 1974, … (g) a company within the meaning of section 1(1) of the Companies Act 2006, (h) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011, and (i) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014. 2 Meaning of ‘relevant period’ (1) In this Schedule the ‘relevant period’ means the period which— (a) begins with 26 March 2020, and (b) ends with 30 September 2020. (2) The appropriate national authority may by regulations substitute for the date for the time being specified in sub-paragraph (1)(b)— (a) an earlier date, or (b) a later date that is not more than three months after the date for the time being so specified and is not later than 5 April 2021. 437

Appendix F  Corporate Insolvency and Governance Act 2020, Schedule 14 3 Meetings of qualifying bodies held during the relevant period (1) This paragraph applies to a meeting within sub-paragraph  (2) that is held during the relevant period. (2) A meeting is within this sub-paragraph if it is— (a) a general meeting of a qualifying body, (b) a meeting of any class of members of a qualifying body, or (c) a meeting of delegates appointed by members of a qualifying body. (3) The meeting need not be held at any particular place. (4) The meeting may be held, and any votes may be permitted to be cast, by electronic means or any other means. (5) The meeting may be held without any number of those participating in the meeting being together at the same place. (6) A member of the qualifying body does not have a right— (a) to attend the meeting in person, (b) to participate in the meeting other than by voting, or (c) to vote by particular means. (7) The provisions of any enactment relating to meetings within sub-paragraph (2) have effect subject to this paragraph. (8) The provisions of the constitution or rules of the qualifying body have effect subject to this paragraph. 4 Meetings of qualifying bodies held during the relevant period: power to make further provision (1) The appropriate national authority may by regulations make provision for the purposes of, or in connection with, paragraph 3. (2) The appropriate national authority may by regulations make provision about the means by which, the form in which, and the period within which, any notice or other document relating to a meeting to which paragraph 3 applies or is expected to apply may be given or made available. (3) Regulations under this paragraph may— (a) disapply or modify provisions of an enactment relating to meetings within paragraph 3(2); (b) disapply or modify provisions of the constitution or rules of a qualifying body; (c) make different provision for different purposes; (d) make consequential, incidental or supplementary provision (including provision disapplying or modifying a provision of an enactment); (e) make transitional provision or savings. (4) In this paragraph ‘the appropriate national authority’ means— (a) in relation to qualifying bodies within paragraph 1(g) or (h), the Secretary of State, 438

Corporate Insolvency and Governance Act 2020, Schedule 14  Appendix F (b) in relation to qualifying bodies within paragraph 1(c), (d), (e) or (i), the Treasury. 5 Extension of period for qualifying body to hold annual general meeting (1) This paragraph applies where by reason of any provision a qualifying body is or was under a duty to hold a general meeting as its annual general meeting during a period (‘the due period’) that ends during the relevant period. (2) The provision is to be read as if it imposes (and had always imposed) a duty on the qualifying body to hold a general meeting as its annual general meeting during the period that begins with the due period and ends with the relevant period (but this is subject to regulations under paragraph 6). (3) If by reason of regulations made under paragraph 2 the relevant period is a period that ends after 30 September 2020 this paragraph has effect as if the relevant period were a period that ends with 30 September 2020. (4) In this paragraph a reference to ‘any provision’ is a reference to any provision of an enactment or of the constitution or rules of the qualifying body. 6 Power to extend period for qualifying body to hold annual general meeting (1) The appropriate national authority may by regulations provide for any provision that would (but for the regulations) have the effect mentioned in sub-paragraph  (2) to be read as if instead it had (and always had had) the effect mentioned in sub-paragraph (3). (2) The effect is that of imposing on a qualifying body a duty to hold a general meeting as its annual general meeting during a period (‘the overlapping period’) that overlaps to any extent with the relevant period. (3) The effect is that of imposing on the qualifying body a duty to hold a general meeting as its annual general meeting during a period that— (a) begins with the overlapping period, and (b) ends with such period immediately following the end of the overlapping period as is specified in the regulations. (4) A period specified in regulations for the purposes of sub-paragraph (3)(b) must not exceed 8 months. (5) Regulations under this paragraph may— (a) make different provision for different purposes; (b) make consequential, incidental or supplementary provision (including provision disapplying or modifying a provision of an enactment); (c) make transitional provision or savings. (6) In sub-paragraph  (1) the reference to ‘any provision’ is a reference to any provision of an enactment or of the constitution or rules of a qualifying body. (7) In this paragraph ‘the appropriate national authority’ has the same meaning as in paragraph 4.

439

Appendix G

Model Articles 2008 for Private Companies Limited by Shares

SI 2008/3229 Regulation 2

Schedule 1 Index to the Articles 1. Defined terms 2. Liability of members 3. Directors’ general authority 4. Shareholders’ reserve power 5. Directors may delegate 6. Committees 7. Directors to take decisions collectively 8. Unanimous decisions 9. Calling a directors’ meeting 10. Participation in directors’ meetings 11. Quorum for directors’ meetings 12. Chairing of directors’ meetings 13. Casting vote 14. Conflicts of interest 15. Records of decisions to be kept 16. Directors’ discretion to make further rules 17. Methods of appointing directors 18. Termination of director’s appointment 19. Directors’ remuneration 20. Directors’ expenses 21. All shares to be fully paid up 441

Appendix G  Model Articles 2008 for Private Companies Limited by Shares 22. Powers to issue different classes of share 23. Company not bound by less than absolute interests 24. Share certificates 25. Replacement share certificates 26. Share transfers 27. Transmission of shares 28. Exercise of transmittees’ rights 29. Transmittees bound by prior notices 30. Procedure for declaring dividends 31. Payment of dividends and other distributions 32. No interest on distributions 33. Unclaimed distributions 34. Non-cash distributions 35. Waiver of distributions 36. Authority to capitalise and appropriation of capitalised sums 37. Attendance and speaking at general meetings 38. Quorum for general meetings 39. Chairing general meetings 40. Attendance and speaking by directors and non-shareholders 41. Adjournment 42. Voting: general 43. Errors and disputes 44. Poll votes 45. Content of proxy notices 46. Delivery of proxy notices 47. Amendments to resolutions 48. Means of communication to be used 49. Company seals 50. No right to inspect accounts and other records 51. Provision for employees on cessation of business 52. Indemnity 53. Insurance

442

Model Articles 2008 for Private Companies Limited by Shares  Appendix G

Part 1  Interpretation and Limitation of Liability 1  Defined terms In the articles, unless the context requires otherwise – ‘articles’ means the company’s articles of association; ‘bankruptcy’ includes individual insolvency proceedings in a jurisdiction other than England and Wales or Northern Ireland which have an effect similar to that of bankruptcy; ‘chairman’ has the meaning given in article 12; ‘chairman of the meeting’ has the meaning given in article 25; ‘Companies Acts’ means the Companies Acts (as defined in section 2 of the Companies Act 2006), in so far as they apply to the company; ‘director’ means a director of the company, and includes any person occupying the position of director, by whatever name called; ‘distribution recipient’ has the meaning given in article 31; ‘document’ includes, unless otherwise specified, any document sent or supplied in electronic form; ‘electronic form’ has the meaning given in section 1168 of the Companies Act 2006; ‘fully paid’ in relation to a share, means that the nominal value and any premium to be paid to the company in respect of that share have been paid to the company; ‘hard copy form’ has the meaning given in section 1168 of the Companies Act 2006; ‘holder’ in relation to shares means the person whose name is entered in the register of members as the holder of the shares; ‘instrument’ means a document in hard copy form; ‘ordinary resolution’ has the meaning given in section 282 of the Companies Act 2006; ‘paid’ means paid or credited as paid; ‘participate’, in relation to a directors’ meeting, has the meaning given in article 10; ‘proxy notice’ has the meaning given in article 45; ‘shareholder’ means a person who is the holder of a share; ‘shares’ means shares in the company; ‘special resolution’ has the meaning given in section 283 of the Companies Act 2006; ‘subsidiary’ has the meaning given in section 1159 of the Companies Act 2006; ‘transmittee’ means a person entitled to a share by reason of the death or bankruptcy of a shareholder or otherwise by operation of law; and ‘writing’ means the representation or reproduction of words, symbols or other information in a visible form by any method or combination of methods, whether sent or supplied in electronic form or otherwise. 443

Appendix G  Model Articles 2008 for Private Companies Limited by Shares Unless the context otherwise requires, other words or expressions contained in these articles bear the same meaning as in the Companies Act 2006 as in force on the date when these articles become binding on the company. 2  Liability of members The liability of the members is limited to the amount, if any, unpaid on the shares held by them.

Part 2  Directors Directors’ Powers and Responsibilities 3  Directors’ general authority Subject to the articles, the directors are responsible for the management of the company’s business, for which purpose they may exercise all the powers of the company. 4  Shareholders’ reserve power (1) The shareholders may, by special resolution, direct the directors to take, or refrain from taking, specified action. (2) No such special resolution invalidates anything which the directors have done before the passing of the resolution. 5  Directors may delegate (1) Subject to the articles, the directors may delegate any of the powers which are conferred on them under the articles – (a) to such person or committee; (b) by such means (including by power of attorney); (c) to such an extent; (d) in relation to such matters or territories; and (e) on such terms and conditions; as they think fit. (2) If the directors so specify, any such delegation may authorise further delegation of the directors’ powers by any person to whom they are delegated. (3) The directors may revoke any delegation in whole or part, or alter its terms and conditions. 6 Committees (1) Committees to which the directors delegate any of their powers must follow procedures which are based as far as they are applicable on those provisions of the articles which govern the taking of decisions by directors. (2) The directors may make rules of procedure for all or any committees, which prevail over rules derived from the articles if they are not consistent with them. 444

Model Articles 2008 for Private Companies Limited by Shares  Appendix G

Decision-Making by Directors 7  Directors to take decisions collectively (1) The general rule about decision-making by directors is that any decision of the directors must be either a majority decision at a meeting or a decision taken in accordance with article 8. (2) If – (a) the company only has one director, and (b) no provision of the articles requires it to have more than one director, the general rule does not apply, and the director may take decisions without regard to any of the provisions of the articles relating to directors’ decisionmaking. 8  Unanimous decisions (1) A  decision of the directors is taken in accordance with this article when all eligible directors indicate to each other by any means that they share a common view on a matter. (2) Such a decision may take the form of a resolution in writing, copies of which have been signed by each eligible director or to which each eligible director has otherwise indicated agreement in writing. (3) References in this article to eligible directors are to directors who would have been entitled to vote on the matter had it been proposed as a resolution at a directors’ meeting. (4) A  decision may not be taken in accordance with this article if the eligible directors would not have formed a quorum at such a meeting. 9  Calling a directors’ meeting (1) Any director may call a directors’ meeting by giving notice of the meeting to the directors or by authorising the company secretary (if any) to give such notice. (2) Notice of any directors’ meeting must indicate – (a) its proposed date and time; (b) where it is to take place; and (c) if it is anticipated that directors participating in the meeting will not be in the same place, how it is proposed that they should communicate with each other during the meeting. (3) Notice of a directors’ meeting must be given to each director, but need not be in writing. (4) Notice of a directors’ meeting need not be given to directors who waive their entitlement to notice of that meeting, by giving notice to that effect to the company not more than 7 days after the date on which the meeting is held. Where such notice is given after the meeting has been held, that does not affect the validity of the meeting, or of any business conducted at it. 445

Appendix G  Model Articles 2008 for Private Companies Limited by Shares 10  Participation in directors’ meetings (1) Subject to the articles, directors participate in a directors’ meeting, or part of a directors’ meeting, when – (a) the meeting has been called and takes place in accordance with the articles, and (b) they can each communicate to the others any information or opinions they have on any particular item of the business of the meeting. (2) In determining whether directors are participating in a directors’ meeting, it is irrelevant where any director is or how they communicate with each other. (3) If all the directors participating in a meeting are not in the same place, they may decide that the meeting is to be treated as taking place wherever any of them is. 11  Quorum for directors’ meetings (1) At a directors’ meeting, unless a quorum is participating, no proposal is to be voted on, except a proposal to call another meeting. (2) The quorum for directors’ meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, and unless otherwise fixed it is two. (3) If the total number of directors for the time being is less than the quorum required, the directors must not take any decision other than a decision – (a) to appoint further directors, or (b) to call a general meeting so as to enable the shareholders to appoint further directors. 12  Chairing of directors’ meetings (1) The directors may appoint a director to chair their meetings. (2) The person so appointed for the time being is known as the chairman. (3) The directors may terminate the chairman’s appointment at any time. (4) If the chairman is not participating in a directors’ meeting within ten minutes of the time at which it was to start, the participating directors must appoint one of themselves to chair it. 13  Casting vote (1) If the numbers of votes for and against a proposal are equal, the chairman or other director chairing the meeting has a casting vote. (2) But this does not apply if, in accordance with the articles, the chairman or other director is not to be counted as participating in the decision-making process for quorum or voting purposes. 14  Conflicts of interest (1) If a proposed decision of the directors is concerned with an actual or proposed transaction or arrangement with the company in which a director is interested, that director is not to be counted as participating in the decision-making process for quorum or voting purposes. 446

Model Articles 2008 for Private Companies Limited by Shares  Appendix G (2) But if paragraph  (3) applies, a director who is interested in an actual or proposed transaction or arrangement with the company is to be counted as participating in the decision-making process for quorum and voting purposes. (3) This paragraph applies when – (a) the company by ordinary resolution disapplies the provision of the articles which would otherwise prevent a director from being counted as participating in the decision-making process; (b) the director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest; or (c) the director’s conflict of interest arises from a permitted cause. (4) For the purposes of this article, the following are permitted causes – (a) a guarantee given, or to be given, by or to a director in respect of an obligation incurred by or on behalf of the company or any of its subsidiaries; (b) subscription, or an agreement to subscribe, for shares or other securities of the company or any of its subsidiaries, or to underwrite, sub-underwrite, or guarantee subscription for any such shares or securities; and (c) arrangements pursuant to which benefits are made available to employees and directors or former employees and directors of the company or any of its subsidiaries which do not provide special benefits for directors or former directors. (5) For the purposes of this article, references to proposed decisions and decisionmaking processes include any directors’ meeting or part of a directors’ meeting. (6) Subject to paragraph (7), if a question arises at a meeting of directors or of a committee of directors as to the right of a director to participate in the meeting (or part of the meeting) for voting or quorum purposes, the question may, before the conclusion of the meeting, be referred to the chairman whose ruling in relation to any director other than the chairman is to be final and conclusive. (7) If any question as to the right to participate in the meeting (or part of the meeting) should arise in respect of the chairman, the question is to be decided by a decision of the directors at that meeting, for which purpose the chairman is not to be counted as participating in the meeting (or that part of the meeting) for voting or quorum purposes. 15  Records of decisions to be kept The directors must ensure that the company keeps a record, in writing, for at least 10 years from the date of the decision recorded, of every unanimous or majority decision taken by the directors. 16  Directors’ discretion to make further rules Subject to the articles, the directors may make any rule which they think fit about how they take decisions, and about how such rules are to be recorded or communicated to directors. 447

Appendix G  Model Articles 2008 for Private Companies Limited by Shares

Appointment of Directors 17  Methods of appointing directors (1) Any person who is willing to act as a director, and is permitted by law to do so, may be appointed to be a director – (a) by ordinary resolution, or (b) by a decision of the directors. (2) In any case where, as a result of death, the company has no shareholders and no directors, the personal representatives of the last shareholder to have died have the right, by notice in writing, to appoint a person to be a director. (3) For the purposes of paragraph  (2), where 2 or more shareholders die in circumstances rendering it uncertain who was the last to die, a younger shareholder is deemed to have survived an older shareholder. 18  Termination of director’s appointment A person ceases to be a director as soon as – (a) that person ceases to be a director by virtue of any provision of the Companies Act 2006 or is prohibited from being a director by law; (b) a bankruptcy order is made against that person; (c) a composition is made with that person’s creditors generally in satisfaction of that person’s debts; (d) a registered medical practitioner who is treating that person gives a written opinion to the company stating that that person has become physically or mentally incapable of acting as a director and may remain so for more than three months; (e) by reason of that person’s mental health, a court makes an order which wholly or partly prevents that person from personally exercising any powers or rights which that person would otherwise have; (f) notification is received by the company from the director that the director is resigning from office, and such resignation has taken effect in accordance with its terms. 19  Directors’ remuneration (1) Directors may undertake any services for the company that the directors decide. (2) Directors are entitled to such remuneration as the directors determine – (a) for their services to the company as directors, and (b) for any other service which they undertake for the company. (3) Subject to the articles, a director’s remuneration may – (a) take any form, and (b) include any arrangements in connection with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director. 448

Model Articles 2008 for Private Companies Limited by Shares  Appendix G (4) Unless the directors decide otherwise, directors’ remuneration accrues from day to day. (5) Unless the directors decide otherwise, directors are not accountable to the company for any remuneration which they receive as directors or other officers or employees of the company’s subsidiaries or of any other body corporate in which the company is interested. 20  Directors’ expenses The company may pay any reasonable expenses which the directors properly incur in connection with their attendance at – (a) meetings of directors or committees of directors, (b) general meetings, or (c) separate meetings of the holders of any class of shares or of debentures of the company, or otherwise in connection with the exercise of their powers and the discharge of their responsibilities in relation to the company.

Part 3  Shares and Distributions Shares 21  All shares to be fully paid up (1) No share is to be issued for less than the aggregate of its nominal value and any premium to be paid to the company in consideration for its issue. (2) This does not apply to shares taken on the formation of the company by the subscribers to the company’s memorandum. 22  Powers to issue different classes of share (1) Subject to the articles, but without prejudice to the rights attached to any existing share, the company may issue shares with such rights or restrictions as may be determined by ordinary resolution. (2) The company may issue shares which are to be redeemed, or are liable to be redeemed at the option of the company or the holder, and the directors may determine the terms, conditions and manner of redemption of any such shares. 23  Company not bound by less than absolute interests Except as required by law, no person is to be recognised by the company as holding any share upon any trust, and except as otherwise required by law or the articles, the company is not in any way to be bound by or recognise any interest in a share other than the holder’s absolute ownership of it and all the rights attaching to it. 24  Share certificates (1) The company must issue each shareholder, free of charge, with one or more certificates in respect of the shares which that shareholder holds. 449

Appendix G  Model Articles 2008 for Private Companies Limited by Shares (2) Every certificate must specify – (a) in respect of how many shares, of what class, it is issued; (b) the nominal value of those shares; (c) that the shares are fully paid; and (d) any distinguishing numbers assigned to them. (3) No certificate may be issued in respect of shares of more than one class. (4) If more than one person holds a share, only one certificate may be issued in respect of it. (5) Certificates must – (a) have affixed to them the company’s common seal, or (b) be otherwise executed in accordance with the Companies Acts. 25  Replacement share certificates (1) If a certificate issued in respect of a shareholder’s shares is – (a) damaged or defaced, or (b) said to be lost, stolen or destroyed, that shareholder is entitled to be issued with a replacement certificate in respect of the same shares. (2) A  shareholder exercising the right to be issued with such a replacement certificate – (a) may at the same time exercise the right to be issued with a single certificate or separate certificates; (b) must return the certificate which is to be replaced to the company if it is damaged or defaced; and (c) must comply with such conditions as to evidence, indemnity and the payment of a reasonable fee as the directors decide. 26  Share transfers (1) Shares may be transferred by means of an instrument of transfer in any usual form or any other form approved by the directors, which is executed by or on behalf of the transferor. (2) No fee may be charged for registering any instrument of transfer or other document relating to or affecting the title to any share. (3) The company may retain any instrument of transfer which is registered. (4) The transferor remains the holder of a share until the transferee’s name is entered in the register of members as holder of it. (5) The directors may refuse to register the transfer of a share, and if they do so, the instrument of transfer must be returned to the transferee with the notice of refusal unless they suspect that the proposed transfer may be fraudulent. 27  Transmission of shares (1) If title to a share passes to a transmittee, the company may only recognise the transmittee as having any title to that share. 450

Model Articles 2008 for Private Companies Limited by Shares  Appendix G (2) A  transmittee who produces such evidence of entitlement to shares as the directors may properly require – (a) may, subject to the articles, choose either to become the holder of those shares or to have them transferred to another person, and (b) subject to the articles, and pending any transfer of the shares to another person, has the same rights as the holder had. (3) But transmittees do not have the right to attend or vote at a general meeting, or agree to a proposed written resolution, in respect of shares to which they are entitled, by reason of the holder’s death or bankruptcy or otherwise, unless they become the holders of those shares. 28  Exercise of transmittees’ rights (1) Transmittees who wish to become the holders of shares to which they have become entitled must notify the company in writing of that wish. (2) If the transmittee wishes to have a share transferred to another person, the transmittee must execute an instrument of transfer in respect of it. (3) Any transfer made or executed under this article is to be treated as if it were made or executed by the person from whom the transmittee has derived rights in respect of the share, and as if the event which gave rise to the transmission had not occurred. 29  Transmittees bound by prior notices If a notice is given to a shareholder in respect of shares and a transmittee is entitled to those shares, the transmittee is bound by the notice if it was given to the shareholder before the transmittee’s name has been entered in the register of members.

Dividends and Other Distributions 30  Procedure for declaring dividends (1) The company may by ordinary resolution declare dividends, and the directors may decide to pay interim dividends. (2) A  dividend must not be declared unless the directors have made a recommendation as to its amount. Such a dividend must not exceed the amount recommended by the directors. (3) No dividend may be declared or paid unless it is in accordance with shareholders’ respective rights. (4) Unless the shareholders’ resolution to declare or directors’ decision to pay a dividend, or the terms on which shares are issued, specify otherwise, it must be paid by reference to each shareholder’s holding of shares on the date of the resolution or decision to declare or pay it. (5) If the company’s share capital is divided into different classes, no interim dividend may be paid on shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrear. (6) The directors may pay at intervals any dividend payable at a fixed rate if it appears to them that the profits available for distribution justify the payment. 451

Appendix G  Model Articles 2008 for Private Companies Limited by Shares (7) If the directors act in good faith, they do not incur any liability to the holders of shares conferring preferred rights for any loss they may suffer by the lawful payment of an interim dividend on shares with deferred or non-preferred rights. 31  Payment of dividends and other distributions (1) Where a dividend or other sum which is a distribution is payable in respect of a share, it must be paid by one or more of the following means – (a) transfer to a bank or building society account specified by the distribution recipient either in writing or as the directors may otherwise decide; (b) sending a cheque made payable to the distribution recipient by post to the distribution recipient at the distribution recipient’s registered address (if the distribution recipient is a holder of the share), or (in any other case) to an address specified by the distribution recipient either in writing or as the directors may otherwise decide; (c) sending a cheque made payable to such person by post to such person at such address as the distribution recipient has specified either in writing or as the directors may otherwise decide; or (d) any other means of payment as the directors agree with the distribution recipient either in writing or by such other means as the directors decide. (2) In the articles, ‘the distribution recipient’ means, in respect of a share in respect of which a dividend or other sum is payable – (a) the holder of the share; or (b) if the share has two or more joint holders, whichever of them is named first in the register of members; or (c) if the holder is no longer entitled to the share by reason of death or bankruptcy, or otherwise by operation of law, the transmittee. 32  No interest on distributions The company may not pay interest on any dividend or other sum payable in respect of a share unless otherwise provided by – (a) the terms on which the share was issued, or (b) the provisions of another agreement between the holder of that share and the company. 33  Unclaimed distributions (1) All dividends or other sums which are – (a) payable in respect of shares, and (b) unclaimed after having been declared or become payable, may be invested or otherwise made use of by the directors for the benefit of the company until claimed. (2) The payment of any such dividend or other sum into a separate account does not make the company a trustee in respect of it. 452

Model Articles 2008 for Private Companies Limited by Shares  Appendix G (3) If – (a) twelve years have passed from the date on which a dividend or other sum became due for payment, and (b) the distribution recipient has not claimed it, the distribution recipient is no longer entitled to that dividend or other sum and it ceases to remain owing by the company. 34  Non-cash distributions (1) Subject to the terms of issue of the share in question, the company may, by ordinary resolution on the recommendation of the directors, decide to pay all or part of a dividend or other distribution payable in respect of a share by transferring non-cash assets of equivalent value (including, without limitation, shares or other securities in any company). (2) For the purposes of paying a non-cash distribution, the directors may make whatever arrangements they think fit, including, where any difficulty arises regarding the distribution – (a) fixing the value of any assets; (b) paying cash to any distribution recipient on the basis of that value in order to adjust the rights of recipients; and (c) vesting any assets in trustees. 35  Waiver of distributions Distribution recipients may waive their entitlement to a dividend or other distribution payable in respect of a share by giving the company notice in writing to that effect, but if – (a) the share has more than one holder, or (b) more than one person is entitled to the share, whether by reason of the death or bankruptcy of one or more joint holders, or otherwise, the notice is not effective unless it is expressed to be given, and signed, by all the holders or persons otherwise entitled to the share.

Capitalisation of Profits 36  Authority to capitalise and appropriation of capitalised sums (1) Subject to the articles, the directors may, if they are so authorised by an ordinary resolution – (a) decide to capitalise any profits of the company (whether or not they are available for distribution) which are not required for paying a preferential dividend, or any sum standing to the credit of the company’s share premium account or capital redemption reserve; and (b) appropriate any sum which they so decide to capitalise (a ‘capitalised sum’) to the persons who would have been entitled to it if it were distributed by way of dividend (the ‘persons entitled’) and in the same proportions. 453

Appendix G  Model Articles 2008 for Private Companies Limited by Shares (2) Capitalised sums must be applied – (a) on behalf of the persons entitled, and (b) in the same proportions as a dividend would have been distributed to them. (3) Any capitalised sum may be applied in paying up new shares of a nominal amount equal to the capitalised sum which are then allotted credited as fully paid to the persons entitled or as they may direct. (4) A capitalised sum which was appropriated from profits available for distribution may be applied in paying up new debentures of the company which are then allotted credited as fully paid to the persons entitled or as they may direct. (5) Subject to the articles the directors may – (a) apply capitalised sums in accordance with paragraphs (3) and (4) partly in one way and partly in another; (b) make such arrangements as they think fit to deal with shares or debentures becoming distributable in fractions under this article (including the issuing of fractional certificates or the making of cash payments); and (c) authorise any person to enter into an agreement with the company on behalf of all the persons entitled which is binding on them in respect of the allotment of shares and debentures to them under this article.

Part 4  Decision-Making by Shareholders Organisation of General Meetings 37  Attendance and speaking at general meetings (1) A person is able to exercise the right to speak at a general meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting. (2) A person is able to exercise the right to vote at a general meeting when – (a) that person is able to vote, during the meeting, on resolutions put to the vote at the meeting, and (b) that person’s vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting. (3) The directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it. (4) In determining attendance at a general meeting, it is immaterial whether any two or more members attending it are in the same place as each other. (5) Two or more persons who are not in the same place as each other attend a general meeting if their circumstances are such that if they have (or were to 454

Model Articles 2008 for Private Companies Limited by Shares  Appendix G have) rights to speak and vote at that meeting, they are (or would be) able to exercise them. 38  Quorum for general meetings No business other than the appointment of the chairman of the meeting is to be transacted at a general meeting if the persons attending it do not constitute a quorum. 39  Chairing general meetings (1) If the directors have appointed a chairman, the chairman shall chair general meetings if present and willing to do so. (2) If the directors have not appointed a chairman, or if the chairman is unwilling to chair the meeting or is not present within ten minutes of the time at which a meeting was due to start – (a) the directors present, or (b) (if no directors are present), the meeting, must appoint a director or shareholder to chair the meeting, and the appointment of the chairman of the meeting must be the first business of the meeting. (3) The person chairing a meeting in accordance with this article is referred to as ‘the chairman of the meeting’. 40  Attendance and speaking by directors and non-shareholders (1) Directors may attend and speak at general meetings, whether or not they are shareholders. (2) The chairman of the meeting may permit other persons who are not – (a) shareholders of the company, or (b) otherwise entitled to exercise the rights of shareholders in relation to general meetings, to attend and speak at a general meeting. 41 Adjournment (1) If the persons attending a general meeting within half an hour of the time at which the meeting was due to start do not constitute a quorum, or if during a meeting a quorum ceases to be present, the chairman of the meeting must adjourn it. (2) The chairman of the meeting may adjourn a general meeting at which a quorum is present if – (a) the meeting consents to an adjournment, or (b) it appears to the chairman of the meeting that an adjournment is necessary to protect the safety of any person attending the meeting or ensure that the business of the meeting is conducted in an orderly manner. (3) The chairman of the meeting must adjourn a general meeting if directed to do so by the meeting. 455

Appendix G  Model Articles 2008 for Private Companies Limited by Shares (4) When adjourning a general meeting, the chairman of the meeting must – (a) either specify the time and place to which it is adjourned or state that it is to continue at a time and place to be fixed by the directors, and (b) have regard to any directions as to the time and place of any adjournment which have been given by the meeting. (5) If the continuation of an adjourned meeting is to take place more than 14 days after it was adjourned, the company must give at least 7 clear days’ notice of it (that is, excluding the day of the adjourned meeting and the day on which the notice is given) – (a) to the same persons to whom notice of the company’s general meetings is required to be given, and (b) containing the same information which such notice is required to contain. (6) No business may be transacted at an adjourned general meeting which could not properly have been transacted at the meeting if the adjournment had not taken place.

Voting at General Meetings 42  Voting: general A resolution put to the vote of a general meeting must be decided on a show of hands unless a poll is duly demanded in accordance with the articles. 43  Errors and disputes (1) No objection may be raised to the qualification of any person voting at a general meeting except at the meeting or adjourned meeting at which the vote objected to is tendered, and every vote not disallowed at the meeting is valid. (2) Any such objection must be referred to the chairman of the meeting, whose decision is final. 44  Poll votes (1) A poll on a resolution may be demanded – (a) in advance of the general meeting where it is to be put to the vote, or (b) at a general meeting, either before a show of hands on that resolution or immediately after the result of a show of hands on that resolution is declared. (2) A poll may be demanded by – (a) the chairman of the meeting; (b) the directors; (c) two or more persons having the right to vote on the resolution; or (d) a person or persons representing not less than one tenth of the total voting rights of all the shareholders having the right to vote on the resolution. 456

Model Articles 2008 for Private Companies Limited by Shares  Appendix G (3) A demand for a poll may be withdrawn if – (a) the poll has not yet been taken, and (b) the chairman of the meeting consents to the withdrawal. (4) Polls must be taken immediately and in such manner as the chairman of the meeting directs. 45  Content of proxy notices (1) Proxies may only validly be appointed by a notice in writing (a ‘proxy notice’) which – (a) states the name and address of the shareholder appointing the proxy; (b) identifies the person appointed to be that shareholder’s proxy and the general meeting in relation to which that person is appointed; (c) is signed by or on behalf of the shareholder appointing the proxy, or is authenticated in such manner as the directors may determine; and (d) is delivered to the company in accordance with the articles and any instructions contained in the notice of the general meeting to which they relate. (2) The company may require proxy notices to be delivered in a particular form, and may specify different forms for different purposes. (3) Proxy notices may specify how the proxy appointed under them is to vote (or that the proxy is to abstain from voting) on one or more resolutions. (4) Unless a proxy notice indicates otherwise, it must be treated as – (a) allowing the person appointed under it as a proxy discretion as to how to vote on any ancillary or procedural resolutions put to the meeting, and (b) appointing that person as a proxy in relation to any adjournment of the general meeting to which it relates as well as the meeting itself. 46  Delivery of proxy notices (1) A person who is entitled to attend, speak or vote (either on a show of hands or on a poll) at a general meeting remains so entitled in respect of that meeting or any adjournment of it, even though a valid proxy notice has been delivered to the company by or on behalf of that person. (2) An appointment under a proxy notice may be revoked by delivering to the company a notice in writing given by or on behalf of the person by whom or on whose behalf the proxy notice was given. (3) A notice revoking a proxy appointment only takes effect if it is delivered before the start of the meeting or adjourned meeting to which it relates. (4) If a proxy notice is not executed by the person appointing the proxy, it must be accompanied by written evidence of the authority of the person who executed it to execute it on the appointor’s behalf. 47  Amendments to resolutions (1) An ordinary resolution to be proposed at a general meeting may be amended by ordinary resolution if – 457

Appendix G  Model Articles 2008 for Private Companies Limited by Shares (a) notice of the proposed amendment is given to the company in writing by a person entitled to vote at the general meeting at which it is to be proposed not less than 48 hours before the meeting is to take place (or such later time as the chairman of the meeting may determine), and (b) the proposed amendment does not, in the reasonable opinion of the chairman of the meeting, materially alter the scope of the resolution. (2) A special resolution to be proposed at a general meeting may be amended by ordinary resolution, if – (a) the chairman of the meeting proposes the amendment at the general meeting at which the resolution is to be proposed, and (b) the amendment does not go beyond what is necessary to correct a grammatical or other non-substantive error in the resolution. (3) If the chairman of the meeting, acting in good faith, wrongly decides that an amendment to a resolution is out of order, the chairman’s error does not invalidate the vote on that resolution.

Part 5  Administrative Arrangements 48  Means of communication to be used (1) Subject to the articles, anything sent or supplied by or to the company under the articles may be sent or supplied in any way in which the Companies Act 2006 provides for documents or information which are authorised or required by any provision of that Act to be sent or supplied by or to the company. (2) Subject to the articles, any notice or document to be sent or supplied to a director in connection with the taking of decisions by directors may also be sent or supplied by the means by which that director has asked to be sent or supplied with such notices or documents for the time being. (3) A director may agree with the company that notices or documents sent to that director in a particular way are to be deemed to have been received within a specified time of their being sent, and for the specified time to be less than 48 hours. 49  Company seals (1) Any common seal may only be used by the authority of the directors. (2) The directors may decide by what means and in what form any common seal is to be used. (3) Unless otherwise decided by the directors, if the company has a common seal and it is affixed to a document, the document must also be signed by at least one authorised person in the presence of a witness who attests the signature. (4) For the purposes of this article, an authorised person is – (a) any director of the company; (b) the company secretary (if any); or (c) any person authorised by the directors for the purpose of signing documents to which the common seal is applied. 458

Model Articles 2008 for Private Companies Limited by Shares  Appendix G 50  No right to inspect accounts and other records Except as provided by law or authorised by the directors or an ordinary resolution of the company, no person is entitled to inspect any of the company’s accounting or other records or documents merely by virtue of being a shareholder. 51  Provision for employees on cessation of business The directors may decide to make provision for the benefit of persons employed or formerly employed by the company or any of its subsidiaries (other than a director or former director or shadow director) in connection with the cessation or transfer to any person of the whole or part of the undertaking of the company or that subsidiary.

Directors’ Indemnity and Insurance 52 Indemnity (1) Subject to paragraph (2), a relevant director of the company or an associated company may be indemnified out of the company’s assets against – (a) any liability incurred by that director in connection with any negligence, default, breach of duty or breach of trust in relation to the company or an associated company, (b) any liability incurred by that director in connection with the activities of the company or an associated company in its capacity as a trustee of an occupational pension scheme (as defined in section 235(6) of the Companies Act 2006), (c) any other liability incurred by that director as an officer of the company or an associated company. (2) This article does not authorise any indemnity which would be prohibited or rendered void by any provision of the Companies Acts or by any other provision of law. (3) In this article – (a) companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate, and (b) a ‘relevant director’ means any director or former director of the company or an associated company. 53 Insurance (1) The directors may decide to purchase and maintain insurance, at the expense of the company, for the benefit of any relevant director in respect of any relevant loss. (2) In this article – (a) a ‘relevant director’ means any director or former director of the company or an associated company, (b) a ‘relevant loss’ means any loss or liability which has been or may be incurred by a relevant director in connection with that director’s duties 459

Appendix G  Model Articles 2008 for Private Companies Limited by Shares or powers in relation to the company, any associated company or any pension fund or employees’ share scheme of the company or associated company, and (c) companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate.

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Appendix H

Model Articles 2008 for Private Companies Limited by Guarantee

SI 2008/3229 Regulation 3

Schedule  2 Index to the Articles 1. Defined terms 2. Liability of members 3. Directors’ general authority 4. Members’ reserve power 5. Directors may delegate 6. Committees 7. Directors to take decisions collectively 8. Unanimous decisions 9. Calling a directors’ meeting 10. Participation in directors’ meetings 11. Quorum for directors’ meetings 12. Chairing of directors’ meetings 13. Casting vote 14. Conflicts of interest 15. Records of decisions to be kept 16. Directors’ discretion to make further rules 17. Methods of appointing directors 18. Termination of director’s appointment 19. Directors’ remuneration 20. Directors’ expenses 461

Appendix H  Model Articles 2008 for Private Companies Limited by Guarantee 21. Applications for membership 22. Termination of membership 23. Attendance and speaking at general meetings 24. Quorum for general meetings 25. Chairing general meetings 26. Attendance and speaking by directors and non-members 27. Adjournment 28. Voting: general 29. Errors and disputes 30. Poll votes 31. Content of proxy notices 32. Delivery of proxy notices 33. Amendments to resolutions 34. Means of communication to be used 35. Company seals 36. No right to inspect accounts and other records 37. Provision for employees on cessation of business 38. Indemnity 39. Insurance

Part 1  Interpretation and Limitation of Liability 1  Defined terms In the articles, unless the context requires otherwise – ‘articles’ means the company’s articles of association; ‘bankruptcy’ includes individual insolvency proceedings in a jurisdiction other than England and Wales or Northern Ireland which have an effect similar to that of bankruptcy; ‘chairman’ has the meaning given in article 12; ‘chairman of the meeting’ has the meaning given in article 25; ‘Companies Acts’ means the Companies Acts (as defined in section 2 of the Companies Act 2006), in so far as they apply to the company; ‘director’ means a director of the company, and includes any person occupying the position of director, by whatever name called; ‘document’ includes, unless otherwise specified, any document sent or supplied in electronic form; ‘electronic form’ has the meaning given in section 1168 of the Companies Act 2006; 462

Model Articles 2008 for Private Companies Limited by Guarantee  Appendix H ‘member’ has the meaning given in section 112 of the Companies Act 2006; ‘ordinary resolution’ has the meaning given in section 282 of the Companies Act 2006; ‘participate’, in relation to a directors’ meeting, has the meaning given in article 10; ‘proxy notice’ has the meaning given in article 31; ‘special resolution’ has the meaning given in section 283 of the Companies Act 2006; ‘subsidiary’ has the meaning given in section 1159 of the Companies Act 2006; and ‘writing’ means the representation or reproduction of words, symbols or other information in a visible form by any method or combination of methods, whether sent or supplied in electronic form or otherwise. Unless the context otherwise requires, other words or expressions contained in these articles bear the same meaning as in the Companies Act 2006 as in force on the date when these articles become binding on the company. 2  Liability of members The liability of each member is limited to £1, being the amount that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member, for – (a) payment of the company’s debts and liabilities contracted before he ceases to be a member, (b) payment of the costs, charges and expenses of winding up, and (c) adjustment of the rights of the contributories among themselves.

Part 2  Directors Directors’ Powers and Responsibilities 3  Directors’ general authority Subject to the articles, the directors are responsible for the management of the company’s business, for which purpose they may exercise all the powers of the company. 4  Members’ reserve power (1) The members may, by special resolution, direct the directors to take, or refrain from taking, specified action. (2) No such special resolution invalidates anything which the directors have done before the passing of the resolution. 5  Directors may delegate (1) Subject to the articles, the directors may delegate any of the powers which are conferred on them under the articles – (a) to such person or committee; (b) by such means (including by power of attorney); 463

Appendix H  Model Articles 2008 for Private Companies Limited by Guarantee (c) to such an extent; (d) in relation to such matters or territories; and (e) on such terms and conditions; as they think fit. (2) If the directors so specify, any such delegation may authorise further delegation of the directors’ powers by any person to whom they are delegated. (3) The directors may revoke any delegation in whole or part, or alter its terms and conditions. 6 Committees (1) Committees to which the directors delegate any of their powers must follow procedures which are based as far as they are applicable on those provisions of the articles which govern the taking of decisions by directors. (2) The directors may make rules of procedure for all or any committees, which prevail over rules derived from the articles if they are not consistent with them.

Decision-Making by Directors 7  Directors to take decisions collectively (1) The general rule about decision-making by directors is that any decision of the directors must be either a majority decision at a meeting or a decision taken in accordance with article 8. (2) If – (a) the company only has one director, and (b) no provision of the articles requires it to have more than one director, the general rule does not apply, and the director may take decisions without regard to any of the provisions of the articles relating to directors’ decisionmaking. 8  Unanimous decisions (1) A  decision of the directors is taken in accordance with this article when all eligible directors indicate to each other by any means that they share a common view on a matter. (2) Such a decision may take the form of a resolution in writing, copies of which have been signed by each eligible director or to which each eligible director has otherwise indicated agreement in writing. (3) References in this article to eligible directors are to directors who would have been entitled to vote on the matter had it been proposed as a resolution at a directors’ meeting. (4) A  decision may not be taken in accordance with this article if the eligible directors would not have formed a quorum at such a meeting. 9  Calling a directors’ meeting (1) Any director may call a directors’ meeting by giving notice of the meeting to the directors or by authorising the company secretary (if any) to give such notice. 464

Model Articles 2008 for Private Companies Limited by Guarantee  Appendix H (2) Notice of any directors’ meeting must indicate – (a) its proposed date and time; (b) where it is to take place; and (c) if it is anticipated that directors participating in the meeting will not be in the same place, how it is proposed that they should communicate with each other during the meeting. (3) Notice of a directors’ meeting must be given to each director, but need not be in writing. (4) Notice of a directors’ meeting need not be given to directors who waive their entitlement to notice of that meeting, by giving notice to that effect to the company not more than 7 days after the date on which the meeting is held. Where such notice is given after the meeting has been held, that does not affect the validity of the meeting, or of any business conducted at it. 10  Participation in directors’ meetings (1) Subject to the articles, directors participate in a directors’ meeting, or part of a directors’ meeting, when – (a) the meeting has been called and takes place in accordance with the articles, and (b) they can each communicate to the others any information or opinions they have on any particular item of the business of the meeting. (2) In determining whether directors are participating in a directors’ meeting, it is irrelevant where any director is or how they communicate with each other. (3) If all the directors participating in a meeting are not in the same place, they may decide that the meeting is to be treated as taking place wherever any of them is. 11  Quorum for directors’ meetings (1) At a directors’ meeting, unless a quorum is participating, no proposal is to be voted on, except a proposal to call another meeting. (2) The quorum for directors’ meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, and unless otherwise fixed it is two. (3) If the total number of directors for the time being is less than the quorum required, the directors must not take any decision other than a decision – (a) to appoint further directors, or (b) to call a general meeting so as to enable the members to appoint further directors. 12  Chairing of directors’ meetings (1) The directors may appoint a director to chair their meetings. (2) The person so appointed for the time being is known as the chairman. (3) The directors may terminate the chairman’s appointment at any time. 465

Appendix H  Model Articles 2008 for Private Companies Limited by Guarantee (4) If the chairman is not participating in a directors’ meeting within ten minutes of the time at which it was to start, the participating directors must appoint one of themselves to chair it. 13  Casting vote (1) If the numbers of votes for and against a proposal are equal, the chairman or other director chairing the meeting has a casting vote. (2) But this does not apply if, in accordance with the articles, the chairman or other director is not to be counted as participating in the decision-making process for quorum or voting purposes. 14  Conflicts of interest (1) If a proposed decision of the directors is concerned with an actual or proposed transaction or arrangement with the company in which a director is interested, that director is not to be counted as participating in the decision-making process for quorum or voting purposes. (2) But if paragraph  (3) applies, a director who is interested in an actual or proposed transaction or arrangement with the company is to be counted as participating in the decision-making process for quorum and voting purposes. (3) This paragraph applies when – (a) the company by ordinary resolution disapplies the provision of the articles which would otherwise prevent a director from being counted as participating in the decision-making process; (b) the director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest; or (c) the director’s conflict of interest arises from a permitted cause. (4) For the purposes of this article, the following are permitted causes – (a) a guarantee given, or to be given, by or to a director in respect of an obligation incurred by or on behalf of the company or any of its subsidiaries; (b) subscription, or an agreement to subscribe, for securities of the company or any of its subsidiaries, or to underwrite, sub-underwrite, or guarantee subscription for any such securities; and (c) arrangements pursuant to which benefits are made available to employees and directors or former employees and directors of the company or any of its subsidiaries which do not provide special benefits for directors or former directors. (5) For the purposes of this article, references to proposed decisions and decisionmaking processes include any directors’ meeting or part of a directors’ meeting. (6) Subject to paragraph (7), if a question arises at a meeting of directors or of a committee of directors as to the right of a director to participate in the meeting (or part of the meeting) for voting or quorum purposes, the question may, before the conclusion of the meeting, be referred to the chairman whose ruling in relation to any director other than the chairman is to be final and conclusive. 466

Model Articles 2008 for Private Companies Limited by Guarantee  Appendix H (7) If any question as to the right to participate in the meeting (or part of the meeting) should arise in respect of the chairman, the question is to be decided by a decision of the directors at that meeting, for which purpose the chairman is not to be counted as participating in the meeting (or that part of the meeting) for voting or quorum purposes. 15  Records of decisions to be kept The directors must ensure that the company keeps a record, in writing, for at least 10 years from the date of the decision recorded, of every unanimous or majority decision taken by the directors. 16  Directors’ discretion to make further rules Subject to the articles, the directors may make any rule which they think fit about how they take decisions, and about how such rules are to be recorded or communicated to directors.

Appointment of Directors 17  Methods of appointing directors (1) Any person who is willing to act as a director, and is permitted by law to do so, may be appointed to be a director – (a) by ordinary resolution, or (b) by a decision of the directors. (2) In any case where, as a result of death, the company has no members and no directors, the personal representatives of the last member to have died have the right, by notice in writing, to appoint a person to be a director. (3) For the purposes of paragraph  (2), where 2 or more members die in circumstances rendering it uncertain who was the last to die, a younger member is deemed to have survived an older member. 18  Termination of director’s appointment A person ceases to be a director as soon as – (a) that person ceases to be a director by virtue of any provision of the Companies Act 2006 or is prohibited from being a director by law; (b) a bankruptcy order is made against that person; (c) a composition is made with that person’s creditors generally in satisfaction of that person’s debts; (d) a registered medical practitioner who is treating that person gives a written opinion to the company stating that that person has become physically or mentally incapable of acting as a director and may remain so for more than three months; (e) …

467

Appendix H  Model Articles 2008 for Private Companies Limited by Guarantee (f) notification is received by the company from the director that the director is resigning from office, and such resignation has taken effect in accordance with its terms. Amendments Para (a) revoked by the Mental Health (Discrimination) Act 2013, s 3(1)(b).

19  Directors’ remuneration (1) Directors may undertake any services for the company that the directors decide. (2) Directors are entitled to such remuneration as the directors determine – (a) for their services to the company as directors, and (b) for any other service which they undertake for the company. (3) Subject to the articles, a director’s remuneration may – (a) take any form, and (b) include any arrangements in connection with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director. (4) Unless the directors decide otherwise, directors’ remuneration accrues from day to day. (5) Unless the directors decide otherwise, directors are not accountable to the company for any remuneration which they receive as directors or other officers or employees of the company’s subsidiaries or of any other body corporate in which the company is interested. 20  Directors’ expenses The company may pay any reasonable expenses which the directors properly incur in connection with their attendance at – (a) meetings of directors or committees of directors, (b) general meetings, or (c) separate meetings of the holders of debentures of the company, or otherwise in connection with the exercise of their powers and the discharge of their responsibilities in relation to the company.

Part 3  Members Becoming and Ceasing To Be A Member 21  Applications for membership No person shall become a member of the company unless – (a) that person has completed an application for membership in a form approved by the directors, and (b) the directors have approved the application. 22  Termination of membership (1) A member may withdraw from membership of the company by giving 7 days’ notice to the company in writing. 468

Model Articles 2008 for Private Companies Limited by Guarantee  Appendix H (2) Membership is not transferable. (3) A person’s membership terminates when that person dies or ceases to exist.

Organisation of General Meetings 23  Attendance and speaking at general meetings (1) A person is able to exercise the right to speak at a general meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting. (2) A person is able to exercise the right to vote at a general meeting when – (a) that person is able to vote, during the meeting, on resolutions put to the vote at the meeting, and (b) that person’s vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting. (3) The directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it. (4) In determining attendance at a general meeting, it is immaterial whether any two or more members attending it are in the same place as each other. (5) Two or more persons who are not in the same place as each other attend a general meeting if their circumstances are such that if they have (or were to have) rights to speak and vote at that meeting, they are (or would be) able to exercise them. 24  Quorum for general meetings No business other than the appointment of the chairman of the meeting is to be transacted at a general meeting if the persons attending it do not constitute a quorum. 25  Chairing general meetings (1) If the directors have appointed a chairman, the chairman shall chair general meetings if present and willing to do so. (2) If the directors have not appointed a chairman, or if the chairman is unwilling to chair the meeting or is not present within ten minutes of the time at which a meeting was due to start – (a) the directors present, or (b) (if no directors are present), the meeting, must appoint a director or member to chair the meeting, and the appointment of the chairman of the meeting must be the first business of the meeting. (3) The person chairing a meeting in accordance with this article is referred to as ‘the chairman of the meeting’. 469

Appendix H  Model Articles 2008 for Private Companies Limited by Guarantee 26  Attendance and speaking by directors and non-members (1) Directors may attend and speak at general meetings, whether or not they are members. (2) The chairman of the meeting may permit other persons who are not members of the company to attend and speak at a general meeting. 27 Adjournment (1) If the persons attending a general meeting within half an hour of the time at which the meeting was due to start do not constitute a quorum, or if during a meeting a quorum ceases to be present, the chairman of the meeting must adjourn it. (2) The chairman of the meeting may adjourn a general meeting at which a quorum is present if – (a) the meeting consents to an adjournment, or (b) it appears to the chairman of the meeting that an adjournment is necessary to protect the safety of any person attending the meeting or ensure that the business of the meeting is conducted in an orderly manner. (3) The chairman of the meeting must adjourn a general meeting if directed to do so by the meeting. (4) When adjourning a general meeting, the chairman of the meeting must – (a) either specify the time and place to which it is adjourned or state that it is to continue at a time and place to be fixed by the directors, and (b) have regard to any directions as to the time and place of any adjournment which have been given by the meeting. (5) If the continuation of an adjourned meeting is to take place more than 14 days after it was adjourned, the company must give at least 7 clear days’ notice of it (that is, excluding the day of the adjourned meeting and the day on which the notice is given) – (a) to the same persons to whom notice of the company’s general meetings is required to be given, and (b) containing the same information which such notice is required to contain. (6) No business may be transacted at an adjourned general meeting which could not properly have been transacted at the meeting if the adjournment had not taken place.

Voting at General Meetings 28  Voting: general A resolution put to the vote of a general meeting must be decided on a show of hands unless a poll is duly demanded in accordance with the articles. 29  Errors and disputes (1) No objection may be raised to the qualification of any person voting at a general meeting except at the meeting or adjourned meeting at which the 470

Model Articles 2008 for Private Companies Limited by Guarantee  Appendix H vote objected to is tendered, and every vote not disallowed at the meeting is valid. (2) Any such objection must be referred to the chairman of the meeting whose decision is final. 30  Poll votes (1) A poll on a resolution may be demanded – (a) in advance of the general meeting where it is to be put to the vote, or (b) at a general meeting, either before a show of hands on that resolution or immediately after the result of a show of hands on that resolution is declared. (2) A poll may be demanded by – (a) the chairman of the meeting; (b) the directors; (c) two or more persons having the right to vote on the resolution; or (d) a person or persons representing not less than one tenth of the total voting rights of all the members having the right to vote on the resolution. (3) A demand for a poll may be withdrawn if – (a) the poll has not yet been taken, and (b) the chairman of the meeting consents to the withdrawal. (4) Polls must be taken immediately and in such manner as the chairman of the meeting directs. 31  Content of proxy notices (1) Proxies may only validly be appointed by a notice in writing (a ‘proxy notice’) which – (a) states the name and address of the member appointing the proxy; (b) identifies the person appointed to be that member’s proxy and the general meeting in relation to which that person is appointed; (c) is signed by or on behalf of the member appointing the proxy, or is authenticated in such manner as the directors may determine; and (d) is delivered to the company in accordance with the articles and any instructions contained in the notice of the general meeting to which they relate. (2) The company may require proxy notices to be delivered in a particular form, and may specify different forms for different purposes. (3) Proxy notices may specify how the proxy appointed under them is to vote (or that the proxy is to abstain from voting) on one or more resolutions. (4) Unless a proxy notice indicates otherwise, it must be treated as – (a) allowing the person appointed under it as a proxy discretion as to how to vote on any ancillary or procedural resolutions put to the meeting, and 471

Appendix H  Model Articles 2008 for Private Companies Limited by Guarantee (b) appointing that person as a proxy in relation to any adjournment of the general meeting to which it relates as well as the meeting itself. 32  Delivery of proxy notices (1) A person who is entitled to attend, speak or vote (either on a show of hands or on a poll) at a general meeting remains so entitled in respect of that meeting or any adjournment of it, even though a valid proxy notice has been delivered to the company by or on behalf of that person. (2) An appointment under a proxy notice may be revoked by delivering to the company a notice in writing given by or on behalf of the person by whom or on whose behalf the proxy notice was given. (3) A notice revoking a proxy appointment only takes effect if it is delivered before the start of the meeting or adjourned meeting to which it relates. (4) If a proxy notice is not executed by the person appointing the proxy, it must be accompanied by written evidence of the authority of the person who executed it to execute it on the appointor’s behalf. 33  Amendments to resolutions (1) An ordinary resolution to be proposed at a general meeting may be amended by ordinary resolution if – (a) notice of the proposed amendment is given to the company in writing by a person entitled to vote at the general meeting at which it is to be proposed not less than 48 hours before the meeting is to take place (or such later time as the chairman of the meeting may determine), and (b) the proposed amendment does not, in the reasonable opinion of the chairman of the meeting, materially alter the scope of the resolution. (2) A special resolution to be proposed at a general meeting may be amended by ordinary resolution, if – (a) the chairman of the meeting proposes the amendment at the general meeting at which the resolution is to be proposed, and (b) the amendment does not go beyond what is necessary to correct a grammatical or other non-substantive error in the resolution. (3) If the chairman of the meeting, acting in good faith, wrongly decides that an amendment to a resolution is out of order, the chairman’s error does not invalidate the vote on that resolution.

Part 4  Administrative Arrangements 34  Means of communication to be used (1) Subject to the articles, anything sent or supplied by or to the company under the articles may be sent or supplied in any way in which the Companies Act 2006 provides for documents or information which are authorised or required by any provision of that Act to be sent or supplied by or to the company. (2) Subject to the articles, any notice or document to be sent or supplied to a director in connection with the taking of decisions by directors may also be 472

Model Articles 2008 for Private Companies Limited by Guarantee  Appendix H sent or supplied by the means by which that director has asked to be sent or supplied with such notices or documents for the time being. (3) A director may agree with the company that notices or documents sent to that director in a particular way are to be deemed to have been received within a specified time of their being sent, and for the specified time to be less than 48 hours. 35  Company seals (1) Any common seal may only be used by the authority of the directors. (2) The directors may decide by what means and in what form any common seal is to be used. (3) Unless otherwise decided by the directors, if the company has a common seal and it is affixed to a document, the document must also be signed by at least one authorised person in the presence of a witness who attests the signature. (4) For the purposes of this article, an authorised person is – (a) any director of the company; (b) the company secretary (if any); or (c) any person authorised by the directors for the purpose of signing documents to which the common seal is applied. 36  No right to inspect accounts and other records Except as provided by law or authorised by the directors or an ordinary resolution of the company, no person is entitled to inspect any of the company’s accounting or other records or documents merely by virtue of being a member. 37  Provision for employees on cessation of business The directors may decide to make provision for the benefit of persons employed or formerly employed by the company or any of its subsidiaries (other than a director or former director or shadow director) in connection with the cessation or transfer to any person of the whole or part of the undertaking of the company or that subsidiary.

Directors’ Indemnity and Insurance 38 Indemnity (1) Subject to paragraph (2), a relevant director of the company or an associated company may be indemnified out of the company’s assets against – (a) any liability incurred by that director in connection with any negligence, default, breach of duty or breach of trust in relation to the company or an associated company, (b) any liability incurred by that director in connection with the activities of the company or an associated company in its capacity as a trustee of an occupational pension scheme (as defined in section 235(6) of the Companies Act 2006), 473

Appendix H  Model Articles 2008 for Private Companies Limited by Guarantee (c) any other liability incurred by that director as an officer of the company or an associated company. (2) This article does not authorise any indemnity which would be prohibited or rendered void by any provision of the Companies Acts or by any other provision of law. (3) In this article – (a) companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate, and (b) a ‘relevant director’ means any director or former director of the company or an associated company. 39 Insurance (1) The directors may decide to purchase and maintain insurance, at the expense of the company, for the benefit of any relevant director in respect of any relevant loss. (2) In this article – (a) a ‘relevant director’ means any director or former director of the company or an associated company, (b) a ‘relevant loss’ means any loss or liability which has been or may be incurred by a relevant director in connection with that director’s duties or powers in relation to the company, any associated company or any pension fund or employees’ share scheme of the company or associated company, and (c) companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate.

474

Appendix I

Model Articles for a Community Interest Company Limited by Guarantee (Large Membership)

The Community Interest Company Regulations 2005, SI 2005/1788 Index to the Articles INTERPRETATION 1. Defined Terms COMMUNITY AND INTEREST COMPANY AND ASSET LOCK 2. Community Interest Company 3. Asset Lock 4. Not for profit OBJECTS, POWERS AND LIMITATION OF LIABILITY 5. Objects 6. Powers 7. Liability of members DIRECTORS DIRECTORS’ POWERS AND RESPONSIBILITIES 8. Directors’ general authority 9. Members’ reserve power 10. Chair 11. Directors may delegate 12. Committees DECISION-MAKING BY DIRECTORS 13. Directors to take decisions collectively 14. Calling a Directors’ meeting 475

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee 15. Participation in Directors’ meetings 16. Quorum for Directors’ meetings 17. Chairing of Directors’ meetings 18. Decision making at a meeting 19. Decisions without a meeting 20. Conflicts of interest 21. Directors’ power to authorise a conflict of interest 22. Register of Directors’ interests APPOINTMENT AND RETIREMENT OF DIRECTORS 23. Methods of appointing directors 24. Termination of Director’s appointment 25. Directors’ remuneration 26. Directors’ expenses MEMBERS BECOMING AND CEASING TO BE A MEMBER 27. Becoming a member 28. Termination of membership ORGANISATION OF GENERAL MEETINGS 29. General meetings 30. Length of notice 31. Contents of notice 32. Service of notice 33. Attendance and speaking at general meetings 34. Quorum for general meetings 35. Chairing general meetings 36. Attendance and speaking by Directors and non-members 37. Adjournment VOTING AT GENERAL MEETINGS 38. Voting: general 39. Votes 40. Poll votes 41. Errors and disputes 42. Content of proxy notices 43. Delivery of proxy notices 44. Amendments to resolutions 476

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I WRITTEN RESOLUTIONS 45. Written resolutions ADMINISTRATIVE ARRANGEMENTS AND MISCELLANEOUS 46. Means of communication to be used 47. Irregularities 48. Minutes 49. Records and accounts 50. Indemnity 51. Insurance 52. Exclusion of model articles SCHEDULE

The Companies Act 2006 Articles of Association1 of [INSERT NAME] Community Interest Company/C.I.C. delete as applicable]

Interpretation 1.  Defined Terms The interpretation of these Articles is governed by the provisions set out in the Schedule at end of the Articles.

Community interest company and asset lock 2.  Community Interest Company The Company is to be a community interest company. 3.  Asset Lock 3.1

The Company shall not transfer any of its assets other than for full consideration.

3.2

Provided the conditions in Article  3.3 are satisfied, Article  3.1 shall not apply to: (a) the transfer of assets to any specified asset-locked body, or (with the consent of the Regulator) to any other asset-locked body; and

1

These Articles of Association were published by the Office of the Regulator of Community Interest Companies on 6 March 2019.

477

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee (b) the transfer of assets made for the benefit of the community other than by way of a transfer of assets into an asset-locked body. 3.3

The conditions are that the transfer of assets must comply with any restrictions on the transfer of assets for less than full consideration which may be set out elsewhere in the Memorandum or Articles of the Company.

3.4 If: 3.4.1

the Company is wound up under the Insolvency Act 1986; and

3.4.2

all its liabilities have been satisfied

any residual assets shall be given or transferred to the asset-locked body specified in Article 3.5 below. 3.5

For the purposes of this Article  3, the following asset-locked body is specified as a potential recipient of the Company’s assets under Articles 3.2 and 3.4:

Name: [ ………………………………………..] (Please note that a community interest company cannot nominate itself as the asset locked body. It also cannot nominate a non-asset locked body. An asset locked body is defined as a CIC or charity, a permitted society or non-UK based equivalent.) Charity Registration Number (if applicable): [……………………………] Company Registration Number (if applicable): […………………………] Registered Office: [………………………………………………………………….] 4.  Not for profit The Company is not established or conducted for private gain: any surplus or assets are used principally for the benefit of the community.

Objects, powers and limitation of liability 5. Objects The objects of the Company are to carry on activities which benefit the community and in particular (without limitation) to [………………………………………………]. 6. Powers To further its objects the Company may do all such lawful things as may further the Company’s objects and, in particular, but, without limitation, may borrow or raise and secure the payment of money for any purpose including for the purposes of investment or of raising funds. 7.  Liability of members The liability of each member is limited to £1, being the amount that each member undertakes to contribute to the assets of the Company in the event of its being wound up while he or she is a member or within one year after he or she ceases to be a member, for: 478

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I 7.1

payment of the Company’s debts and liabilities contracted before he or she ceases to be a member;

7.2

payment of the costs, charges and expenses of winding up; and

7.3

adjustment of the rights of the contributories among themselves.

Directors Directors’ powers and responsibilities 8.  Directors’ general authority Subject to the Articles, the Directors are responsible for the management of the Company’s business, for which purpose they may exercise all the powers of the Company. 9.  Members’ reserve power 9.1

The members may, by special resolution, direct the Directors to take, or refrain from taking, specific action.

9.2

No such special resolution invalidates anything which the Directors have done before the passing of the resolution.

10. Chair The Directors may appoint one of their number to be the chair of the Directors for such term of office as they determine and may at any time remove him or her from office. 11.  Directors may delegate 11.1

Subject to the Articles, the Directors may delegate any of the powers which are conferred on them under the Articles: 11.1.1 to such person or committee; 11.1.2 by such means (including by power of attorney); 11.1.3 to such an extent; 11.1.4 in relation to such matters or territories; and 11.1.5 on such terms and conditions; as they think fit.

11.2

If the Directors so specify, any such delegation may authorise further delegation of the Directors’ powers by any person to whom they are delegated.

11.3

The Directors may revoke any delegation in whole or part, or alter its terms and conditions.

12. Committees 12.1

Committees to which the Directors delegate any of their powers must follow procedures which are based as far as they are applicable on those provisions of the Articles which govern the taking of decisions by Directors. 479

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee 12.2

The Directors may make rules of procedure for all or any committees, which prevail over rules derived from the Articles if they are not consistent with them.

Decision-making by Directors 13.  Directors to take decisions collectively Any decision of the Directors must be either a majority decision at a meeting or a decision taken in accordance with Article 19. 14.  Calling a Directors’ meeting 14.1

Two Directors may (and the Secretary, if any, must at the request of two Directors) call a Directors’ meeting.

14.2

A Directors’ meeting must be called by at least seven Clear Days’ notice unless either: 14.2.1 all the Directors agree; or 14.2.2 urgent circumstances require shorter notice.

14.3

Notice of Directors’ meetings must be given to each Director.

14.4

Every notice calling a Directors’ meeting must specify: 14.4.1 the place, day and time of the meeting; and 14.4.2 if it is anticipated that Directors participating in the meeting will not be in the same place, how it is proposed that they should communicate with each other during the meeting.

14.5

Notice of Directors’ meetings need not be in Writing.

14.6

Notice of Directors’ meetings may be sent by Electronic Means to an Address provided by the Director for the purpose.

15.  Participation in Directors’ meetings 15.1

Subject to the Articles, Directors participate in a Directors’ meeting, or part of a Directors’ meeting, when: 15.1.1 the meeting has been called and takes place in accordance with the Articles; and 15.1.2 they can each communicate to the others any information or opinions they have on any particular item of the business of the meeting.

15.2

In determining whether Directors are participating in a Directors’ meeting, it is irrelevant where any Director is or how they communicate with each other.

15.3

If all the Directors participating in a meeting are not in the same place, they may decide that the meeting is to be treated as taking place wherever any of them is.

16.  Quorum for Directors’ meetings 16.1

At a Directors’ meeting, unless a quorum is participating, no proposal is to be voted on, except a proposal to call another meeting. 480

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I 16.2

The quorum for Directors’ meetings may be fixed from time to time by a decision of the Directors, but it must never be less than two, and unless otherwise fixed it is [two].

16.3

If the total number of Directors for the time being is less than the quorum required, the Directors must not take any decision other than a decision: 16.3.1 to appoint further Directors; or 16.3.2 to call a general meeting so as to enable the members to appoint further Directors.

17.  Chairing of Directors’ meetings The Chair, if any, or in his or her absence another Director nominated by the Directors present shall preside as chair of each Directors’ meeting. 18.  Decision making at a meeting 18.1

Questions arising at a Directors’ meeting shall be decided by a majority of votes.

18.2

In all proceedings of Directors each Director must not have more than one vote.

18.3

In case of an equality of votes, the Chair shall have a second or casting vote.

19.  Decisions without a meeting 19.1

The Directors may take a unanimous decision without a Directors’ meeting by indicating to each other by any means, including without limitation by Electronic Means, that they share a common view on a matter. Such a decision may, but need not, take the form of a resolution in Writing, copies of which have been signed by each Director or to which each Director has otherwise indicated agreement in Writing.

19.2

A decision which is made in accordance with Article 19.1 shall be as valid and effectual as if it had been passed at a meeting duly convened and held, provided the following conditions are complied with: 19.2.1 approval from each Director must be received by one person being either such person as all the Directors have nominated in advance for that purpose or such other person as volunteers if necessary (‘the Recipient’), which person may, for the avoidance of doubt, be one of the Directors; 19.2.2 following receipt of responses from all of the Directors, the Recipient must communicate to all of the Directors by any means whether the resolution has been formally approved by the Directors in accordance with this Article 19.2.; 19.2.3 the date of the decision shall be the date of the communication from the Recipient confirming formal approval; 19.2.4 the Recipient must prepare a minute of the decision in accordance with Article 48.

20.  Conflicts of interest 20.1

Whenever a Director finds himself or herself in a situation that is reasonably likely to give rise to a Conflict of Interest, he or she must declare his or 481

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee her interest to the Directors unless, or except to the extent that, the other Directors are or ought reasonably to be aware of it already. 20.2

If any question arises as to whether a Director has a Conflict of Interest, the question shall be decided by a majority decision of the other Directors.

20.3

Whenever a matter is to be discussed at a meeting or decided in accordance with Article 19 and a Director has a Conflict of Interest in respect of that matter then, subject to Article 21, he or she must: 20.3.1 remain only for such part of the meeting as in the view of the other Directors is necessary to inform the debate; 20.3.2 not be counted in the quorum for that part of the meeting; and 20.3.3 withdraw during the vote and have no vote on the matter.

20.4

When a Director has a Conflict of Interest which he or she has declared to the Directors, he or she shall not be in breach of his or her duties to the Company by withholding confidential information from the Company if to disclose it would result in a breach of any other duty or obligation of confidence owed by him or her.

21.  Directors’ power to authorise a conflict of interest 21.1

The Directors have power to authorise a Director to be in a position of Conflict of Interest provided: 21.1.1 in relation to the decision to authorise a Conflict of Interest, the conflicted Director must comply with Article 20.3; 21.1.2 in authorising a Conflict of Interest, the Directors can decide the manner in which the Conflict of Interest may be dealt with and, for the avoidance of doubt, they can decide that the Director with a Conflict of Interest can participate in a vote on the matter and can be counted in the quorum; 21.1.3 the decision to authorise a Conflict of Interest can impose such terms as the Directors think fit and is subject always to their right to vary or terminate the authorisation; and

21.2

If a matter, or office, employment or position, has been authorised by the Directors in accordance with Article 21.1. then, even if he or she has been authorised to remain at the meeting by the other Directors, the Director may absent himself or herself from meetings of the Directors at which anything relating to that matter, or that office, employment or position, will or may be discussed.

21.3

A Director shall not be accountable to the Company for any benefit which he or she derives from any matter, or from any office, employment or position, which has been authorised by the Directors in accordance with Article 21.1. (subject to any limits or conditions to which such approval was subject).

22.  Register of Directors’ interests The Directors shall cause a register of Directors’ interests to be kept. A  Director must declare the nature and extent of any interest, direct or indirect, which he or she has in a proposed transaction or arrangement with the Company or in any 482

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I transaction or arrangement entered into by the Company which has not previously been declared.

Appointment and retirement of Directors 23.  Methods of appointing directors 23.1

Those persons notified to the Registrar of Companies as the first Directors of the Company shall be the first Directors.

23.2

Any person who is willing to act as a Director, and is permitted by law to do so, may be appointed to be a Director: (a)

by ordinary resolution; or

(b)

by a decision of the Directors.

23.3

In any case where, as a result of death, the Company has no members and no Directors, the personal representatives of the last member to have died have the right, by notice in writing, to appoint a person to be a member.

23.4

For the purposes of Article  23.3, where two or more members die in circumstances rendering it uncertain who was the last to die, a younger member is deemed to have survived an older member.

24.  Termination of Director’s appointment A person ceases to be a Director as soon as: (a)

that person ceases to be a Director by virtue of any provision of the Companies Acts, or is prohibited from being a Director by law;

(b)

a bankruptcy order is made against that person, or an order is made against that person in individual insolvency proceedings in a jurisdiction other than England and Wales or Northern Ireland which have an effect similar to that of bankruptcy;

(c)

a composition is made with that person’s creditors generally in satisfaction of that person’s debts;

(d)

notification is received by the Company from the Director that the Director is resigning from office, and such resignation has taken effect in accordance with its terms (but only if at least two Directors will remain in office when such resignation has taken effect);

(e)

the Director fails to attend three consecutive meetings of the Directors and the Directors resolve that the Director be removed for this reason; or

(f)

at a general meeting of the Company, a resolution is passed that the Director be removed from office, provided the meeting has invited the views of the Director concerned and considered the matter in the light of such views.

25.  Directors’ remuneration 25.1

Directors may undertake any services for the Company that the Directors decide.

25.2

Directors are entitled to such remuneration as the Directors determine: 483

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee

25.3

(a)

for their services to the Company as Directors; and

(b)

for any other service which they undertake for the Company.

Subject to the Articles, a Director’s remuneration may: (a)

take any form; and

(b)

include any arrangements in connection with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director.

25.4

Unless the Directors decide otherwise, Directors’ remuneration accrues from day to day.

25.5

Unless the Directors decide otherwise, Directors are not accountable to the Company for any remuneration which they receive as Directors or other officers or employees of the Company’s subsidiaries or of any other body corporate in which the Company is interested.

26.  Directors’ expenses The Company may pay any reasonable expenses which the Directors properly incur in connection with their attendance at: (a)

meetings of Directors or committees of Directors;

(b)

general meetings; or

(c)

separate meetings of any class of members or of the holders of any debentures of the Company, or otherwise in connection with the exercise of their powers and the discharge of their responsibilities in relation to the Company.

Members Becoming and ceasing to be a member 27.  Becoming a member 27.1

The subscribers to the Memorandum are the first members of the Company.

27.2

Such other persons as are admitted to membership in accordance with the Articles shall be members of the Company.

27.3

No person shall be admitted a member of the Company unless he or she is approved by the Directors.

27.4

Every person who wishes to become a member shall deliver to the Company an application for membership in such form (and containing such information) as the Directors require and executed by him or her.

28.  Termination of membership 28.1

Membership is not transferable to anyone else.

28.2

Membership is terminated if: 28.2.1 the member dies or ceases to exist; 484

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I 28.2.2 otherwise in accordance with the Articles; or 28.2.3 at a meeting of the Directors at which at least half of the Directors are present, a resolution is passed resolving that the member be expelled on the ground that his or her continued membership is harmful to or is likely to become harmful to the interests of the Company. Such a resolution may not be passed unless the member has been given at least 14 Clear Days’ notice that the resolution is to be proposed, specifying the circumstances alleged to justify expulsion, and has been afforded a reasonable opportunity of being heard by or of making written representations to the Directors. A  member expelled by such a resolution will nevertheless remain liable to pay to the Company any subscription or other sum owed by him or her.

Organisation of general meetings 29.  General meetings 29.1

The Directors may call a general meeting at any time.

29.2

The Directors must call a general meeting if required to do so by the members under the Companies Acts

30.  Length of notice All general meetings must be called by either: 30.1

at least 14 Clear Days’ notice; or

30.2

shorter notice if it is so agreed by [a majority of the members having a right to attend and vote at that meeting. Any such majority must together represent at least [90%] of the total voting rights at that meeting of all the members].

31.  Contents of notice 31.1

Every notice calling a general meeting must specify the place, day and time of the meeting, whether it is a general or an annual general meeting, and the general nature of the business to be transacted.

31.2

If a special resolution is to be proposed, the notice must include the proposed resolution and specify that it is proposed as a special resolution.

31.3

In every notice calling a meeting of the Company there must appear with reasonable prominence a statement informing the member of his or her rights to appoint another person as his or her proxy at a general meeting.

32.  Service of notice Notice of general meetings must be given to every member, to the Directors and to the auditors of the Company. 33.  Attendance and speaking at general meetings 33.1

A person is able to exercise the right to speak at a general meeting when that person is in a position to communicate to all those attending the 485

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee meeting, during the meeting, any information or opinions which that person has on the business of the meeting. 33.2

A person is able to exercise the right to vote at a general meeting when: 33.2.1 that person is able to vote, during the meeting, on resolutions put to the vote at the meeting; and 33.2.2 that person’s vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting.

33.3

The Directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it.

33.4

In determining attendance at a general meeting, it is immaterial whether any two or more members attending it are in the same place as each other.

33.5

Two or more persons who are not in the same place as each other attend a general meeting if their circumstances are such that if they have (or were to have) rights to speak and vote at that meeting, they are (or would be) able to exercise them.

34.  Quorum for general meetings 34.1

No business (other than the appointment of the chair of the meeting) may be transacted at any general meeting unless a quorum is present.

34.2

Two persons entitled to vote on the business to be transacted (each being a member, a proxy for a member or a duly Authorised Representative of a member); or 10% of the total membership (represented in person or by proxy), whichever is greater, shall be a quorum.

34.3

If a quorum is not present within half an hour from the time appointed for the meeting, the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such time and place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting those present and entitled to vote shall be a quorum.

35.  Chairing general meetings 35.1

The Chair (if any) or in his or her absence some other Director nominated by the Directors will preside as chair of every general meeting.

35.2

If neither the Chair nor such other Director nominated in accordance with Article 35.1. (if any) is present within fifteen minutes after the time appointed for holding the meeting and willing to act, the Directors present shall elect one of their number to chair the meeting and, if there is only one Director present and willing to act, he or she shall be chair of the meeting.

35.3

If no Director is willing to act as chair of the meeting, or if no Director is present within fifteen minutes after the time appointed for holding the meeting, the members present in person or by proxy and entitled to vote must choose one of their number to be chair of the meeting, save that a 486

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I proxy holder who is not a member entitled to vote shall not be entitled to be appointed chair of the meeting. 36.  Attendance and speaking by Directors and non-members 36.1

A Director may, even if not a member, attend and speak at any general meeting.

36.2

The chair of the meeting may permit other persons who are not members of the Company to attend and speak at a general meeting.

37. Adjournment 37.1

The chair of the meeting may adjourn a general meeting at which a quorum is present if: 37.1.1 the meeting consents to an adjournment; or 37.1.2 it appears to the chair of the meeting that an adjournment is necessary to protect the safety of any person attending the meeting or ensure that the business of the meeting is conducted in an orderly manner.

37.2

The chair of the meeting must adjourn a general meeting if directed to do so by the meeting.

37.3

When adjourning a general meeting, the chair of the meeting must: 37.3.1 either specify the time and place to which it is adjourned or state that it is to continue at a time and place to be fixed by the Directors; and 37.3.2 have regard to any directions as to the time and place of any adjournment which have been given by the meeting.

37.4

If the continuation of an adjourned meeting is to take place more than 14 days after it was adjourned, the Company must give at least seven Clear Days’ notice of it: 37.4.1 to the same persons to whom notice of the Company’s general meetings is required to be given; and 37.4.2 containing the same information which such notice is required to contain.

37.5

No business may be transacted at an adjourned general meeting which could not properly have been transacted at the meeting if the adjournment had not taken place.

Voting at general meetings 38.  Voting: general 38.1

A  resolution put to the vote of a general meeting must be decided on a show of hands unless a poll is duly demanded in accordance with the Articles.

38.2

A person who is not a member of the Company shall not have any right to vote at a general meeting of the Company; but this is without prejudice 487

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee to any right to vote on a resolution affecting the rights attached to a class of the Company’s debentures. 38.3

Article 38.2. shall not prevent a person who is a proxy for a member or a duly Authorised Representative from voting at a general meeting of the Company.

39. Votes 39.1

On a vote on a resolution on a show of hands at a meeting every person present in person (whether a member, proxy or Authorised Representative of a member) and entitled to vote shall have a maximum of one vote.

39.2

On a vote on a resolution on a poll at a meeting every member present in person or by proxy or Authorised Representative shall have one vote.

39.3

In the case of an equality of votes, whether on a show of hands or on a poll, the chair of the meeting shall not be entitled to a casting vote in addition to any other vote he or she may have.

39.4

No member shall be entitled to vote at any general meeting unless all monies presently payable by him, her or it to the Company have been paid.

39.5

The following provisions apply to any organisation that is a member (‘a Member Organisation’): 39.5.1 a Member Organisation may nominate any individual to act as its representative (‘an Authorised Representative’) at any meeting of the Company; 39.5.2 the Member Organisation must give notice in Writing to the Company of the name of its Authorised Representative. The Authorised Representative will not be entitled to represent the Member Organisation at any meeting of the Company unless such notice has been received by the Company. The Authorised Representative may continue to represent the Member Organisation until notice in Writing is received by the Company to the contrary; 39.5.3 a Member Organisation may appoint an Authorised Representative to represent it at a particular meeting of the Company or at all meetings of the Company until notice in Writing to the contrary is received by the Company; 39.5.4 any notice in Writing received by the Company shall be conclusive evidence of the Authorised Representative’s authority to represent the Member Organisation or that his or her authority has been revoked. The Company shall not be required to consider whether the Authorised Representative has been properly appointed by the Member Organisation; 39.5.5 an individual appointed by a Member Organisation to act as its Authorised Representative is entitled to exercise (on behalf of the Member Organisation) the same powers as the Member Organisation could exercise if it were an individual member; 39.5.6 on a vote on a resolution at a meeting of the Company, the Authorised Representative has the same voting rights as the 488

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I Member Organisation would be entitled to if it was an individual member present in person at the meeting; and 39.5.7 the power to appoint an Authorised Representative under this Article 39.5. is without prejudice to any rights which the Member Organisation has under the Companies Acts and the Articles to appoint a proxy or a corporate representative. 40.  Poll votes 40.1

A poll on a resolution may be demanded: 40.1.1 in advance of the general meeting where it is to be put to the vote; or 40.1.2 at a general meeting, either before a show of hands on that resolution or immediately after the result of a show of hands on that resolution is declared.

40.2

A poll may be demanded by: 40.2.1 the chair of the meeting; 40.2.2 the Directors; 40.2.3 two or more persons having the right to vote on the resolution; 40.2.4 any person, who, by virtue of being appointed proxy for one or more members having the right to vote at the meeting, holds two or more votes; or 40.2.5 a person or persons representing not less than one tenth of the total voting rights of all the members having the right to vote on the resolution.

40.3

A demand for a poll may be withdrawn if: 40.3.1 the poll has not yet been taken; and 40.3.2 the chair of the meeting consents to the withdrawal.

40.4

Polls must be taken immediately and in such manner as the chair of the meeting directs.

41.  Errors and disputes 41.1

No objection may be raised to the qualification of any person voting at a general meeting except at the meeting or adjourned meeting at which the vote objected to is tendered, and every vote not disallowed at the meeting is valid.

41.2

Any such objection must be referred to the chair of the meeting whose decision is final.

42.  Content of proxy notices 42.1

Proxies may only validly be appointed by a notice in writing (a ‘Proxy Notice’) which: (a)

states the name and address of the member appointing the proxy; 489

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee (b)

identifies the person appointed to be that member’s proxy and the general meeting in relation to which that person is appointed;

(c)

is signed by or on behalf of the member appointing the proxy, or is authenticated in such manner as the directors may determine; and

(d)

is delivered to the Company in accordance with the Articles and any instructions contained in the notice of the general meeting to which they relate.

42.2

The Company may require Proxy Notices to be delivered in a particular form, and may specify different forms for different purposes.

42.3

Proxy Notices may specify how the proxy appointed under them is to vote (or that the proxy is to abstain from voting) on one or more resolutions.

42.4

Unless a Proxy Notice indicates otherwise, it must be treated as: (a)

allowing the person appointed under it as a proxy discretion as to how to vote on any ancillary or procedural resolutions put to the meeting; and

(b)

appointing that person as a proxy in relation to any adjournment of the general meeting to which it relates as well as the meeting itself.

43.  Delivery of proxy notices 43.1

A  person who is entitled to attend, speak or vote (either on a show of hands or on a poll) at a general meeting remains so entitled in respect of that meeting or any adjournment of it, even though a valid Proxy Notice has been delivered to the Company by or on behalf of that person.

43.2

An appointment under a Proxy Notice may be revoked by delivering to the Company a notice in Writing given by or on behalf of the person by whom or on whose behalf the Proxy Notice was given.

43.3

A  notice revoking the appointment of a proxy only takes effect if it is delivered before the start of the meeting or adjourned meeting to which it relates.

44.  Amendments to resolutions 44.1

An ordinary resolution to be proposed at a general meeting may be amended by ordinary resolution if: 44.1.1 notice of the proposed amendment is given to the Company in Writing by a person entitled to vote at the general meeting at which it is to be proposed not less than 48 hours before the meeting is to take place (or such later time as the chair of the meeting may determine); and 44.1.2 the proposed amendment does not, in the reasonable opinion of the chair of the meeting, materially alter the scope of the resolution.

44.2

A special resolution to be proposed at a general meeting may be amended by ordinary resolution, if: 490

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I 44.2.1 the chair of the meeting proposes the amendment at the general meeting at which the resolution is to be proposed; and 44.2.2 the amendment does not go beyond what is necessary to correct a grammatical or other non-substantive error in the resolution. 44.3

If the chair of the meeting, acting in good faith, wrongly decides that an amendment to a resolution is out of order, the chair’s error does not invalidate the vote on that resolution.

Written resolutions 45.  Written resolutions 45.1

Subject to Article  45.3., a written resolution of the Company passed in accordance with this Article  45 shall have effect as if passed by the Company in general meeting: 45.1.1 A  written resolution is passed as an ordinary resolution if it is passed by a simple majority of the total voting rights of eligible members. 45.1.2 A written resolution is passed as a special resolution if it is passed by members representing not less than 75% of the total voting rights of eligible members. A  written resolution is not a special resolution unless it states that it was proposed as a special resolution.

45.2

In relation to a resolution proposed as a written resolution of the Company the eligible members are the members who would have been entitled to vote on the resolution on the circulation date of the resolution.

45.3

A members’ resolution under the Companies Acts removing a Director or an auditor before the expiration of his or her term of office may not be passed as a written resolution.

45.4

A copy of the written resolution must be sent to every member together with a statement informing the member how to signify their agreement to the resolution and the date by which the resolution must be passed if it is not to lapse. Communications in relation to written notices shall be sent to the Company’s auditors in accordance with the Companies Acts.

45.5

A  member signifies their agreement to a proposed written resolution when the Company receives from him or her an authenticated Document identifying the resolution to which it relates and indicating his or her agreement to the resolution. 45.5.1 If the Document is sent to the Company in Hard Copy Form, it is authenticated if it bears the member’s signature. 45.5.2 If the Document is sent to the Company by Electronic Means, it is authenticated [if it bears the member’s signature] or [if the identity of the member is confirmed in a manner agreed by the Directors] or [if it is accompanied by a statement of the identity of the member and the Company has no reason to doubt the truth of that statement] or [if it is from an email Address notified by the member to the Company for the purposes of receiving Documents or information by Electronic Means]. 491

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee 45.6

A  written resolution is passed when the required majority of eligible members have signified their agreement to it.

45.7

A  proposed written resolution lapses if it is not passed within 28 days beginning with the circulation date.

Administrative arrangements and miscellaneous 46.  Means of communication to be used 46.1

Subject to the Articles, anything sent or supplied by or to the Company under the Articles may be sent or supplied in any way in which the Companies Act 2006 provides for Documents or information which are authorised or required by any provision of that Act to be sent or supplied by or to the Company.

46.2

Subject to the Articles, any notice or Document to be sent or supplied to a Director in connection with the taking of decisions by Directors may also be sent or supplied by the means by which that Director has asked to be sent or supplied with such notices or Documents for the time being.

46.3

A Director may agree with the Company that notices or Documents sent to that Director in a particular way are to be deemed to have been received within an agreed time of their being sent, and for the agreed time to be less than 48 hours.

47. Irregularities The proceedings at any meeting or on the taking of any poll or the passing of a written resolution or the making of any decision shall not be invalidated by reason of any accidental informality or irregularity (including any accidental omission to give or any non-receipt of notice) or any want of qualification in any of the persons present or voting or by reason of any business being considered which is not referred to in the notice unless a provision of the Companies Acts specifies that such informality, irregularity or want of qualification shall invalidate it. 48. Minutes 48.1

The Directors must cause minutes to be made in books kept for the purpose: 48.1.1 of all appointments of officers made by the Directors; 48.1.2 of all resolutions of the Company and of the Directors; and 48.1.3 of all proceedings at meetings of the Company and of the Directors, and of committees of Directors, including the names of the Directors present at each such meeting; and any such minute, if purported to be signed (or in the case of minutes of Directors’ meetings signed or authenticated) by the chair of the meeting at which the proceedings were had, or by the chair of the next succeeding meeting, shall, as against any member or Director of the Company, be sufficient evidence of the proceedings.

48.2

The minutes must be kept for at least ten years from the date of the meeting, resolution or decision. 492

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I 49.  Records and accounts The Directors shall comply with the requirements of the Companies Acts as to maintaining a members’ register, keeping financial records, the audit or examination of accounts and the preparation and transmission to the Registrar of Companies and the Regulator of: 49.1

annual reports;

49.2

annual returns; and

49.3

annual statements of account.

50. Indemnity 50.1

Subject to Article 50.2., a relevant Director of the Company or an associated company may be indemnified out of the Company’s assets against: (a)

any liability incurred by that Director in connection with any negligence, default, breach of duty or breach of trust in relation to the Company or an associated company;

(b)

any liability incurred by that Director in connection with the activities of the Company or an associated company in its capacity as a trustee of an occupational pension scheme (as defined in section 235(6) of the Companies Act 2006); and

(c)

any other liability incurred by that Director as an officer of the Company or an associated company.

50.2

This Article does not authorise any indemnity which would be prohibited or rendered void by any provision of the Companies Acts or by any other provision of law.

50.3

In this Article: (a)

companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate; and

(b)

a ‘relevant Director’ means any Director or former Director of the Company or an associated company.

51. Insurance 51.1

The Directors may decide to purchase and maintain insurance, at the expense of the Company, for the benefit of any relevant Director in respect of any relevant loss.

51.2

In this Article: (a)

a ‘relevant Director’ means any Director or former Director of the Company or an associated company;

(b)

a ‘relevant loss’ means any loss or liability which has been or may be incurred by a relevant Director in connection with that Director’s duties or powers in relation to the Company, any associated company or any pension fund or employees’ share scheme of the company or associated company; and

(c)

companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate. 493

Appendix I  Model Articles for a Community Interest Company Limited by Guarantee 52.  Exclusion of model articles The relevant model articles for a company limited by guarantee are hereby expressly excluded.

Schedule Interpretation Defined terms 1

In the Articles, unless the context requires otherwise, the following terms shall have the following meanings.

2

Subject to clause 3 of this Schedule, any reference in the Articles to an enactment includes a reference to that enactment as re-enacted or amended from time to time and to any subordinate legislation made under it.

3

Unless the context otherwise requires, other words or expressions contained in these Articles bear the same meaning as in the Companies Act 2006 as in force on the date when the Articles become binding on the Company.

Term

Meaning

1.1 ‘Address’

includes a number or address used for the purposes of sending or receiving Documents by Electronic Means;

1.2 ‘Articles’

the Company’s articles of association;

1.3 ‘Authorised Representative’

means any individual nominated by a Member Organisation to act as its representative at any meeting of the Company in accordance with Article 39;

1.4 ‘asset-locked body’

means (i) a community interest company, a charity or a Permitted Society; or (ii)  a body established outside the United Kingdom that is equivalent to any of those;

1.5 ‘bankruptcy’

includes individual insolvency proceedings in a jurisdiction other than England and Wales or Northern Ireland which have an effect similar to that of bankruptcy;

1.6 ‘Chair’

has the meaning given in Article 10;

1.7 ‘chairman of the meeting’

has the meaning given in Article 35;

1.8 ‘Circulation Date’

in relation to a written resolution, has the meaning given to it in the Companies Acts;

1.9 ‘Clear Days’

in relation to the period of a notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect;

1.10 ‘community’

is to be construed in accordance with accordance with Section 35(5) of the Company’s (Audit) Investigations and Community Enterprise) Act 2004; 494

Model Articles for a Community Interest Company Limited by Guarantee  Appendix I Term

Meaning

1.11 ‘Companies Acts’

means the Companies Acts (as defined in Section 2 of the Companies Act 2006), in so far as they apply to the Company;

1.12 ‘Company’

[ ] [Community Interest Company/C.I.C.];

1.13 ‘Conflict of Interest’

any direct or indirect interest of a Director (whether personal, by virtue of a duty of loyalty to another organisation or otherwise) that conflicts, or might conflict with the interests of the Company;

1.14 ‘Director’

a director of the Company, and includes any person occupying the position of director, by whatever name called;

1.15 ‘Document’

includes, unless otherwise indicated, any Document sent or supplied in Electronic Form;

1.16 ‘Electronic Form’ and ‘Electronic Means’

have the meanings respectively given to them in Section 1168 of the Companies Act 2006;

1.17 ‘Hard Copy Form’

has the meaning given to it in the Companies Act 2006;

1.18 ‘Memorandum’

the Company’s memorandum of association;

1.19 ‘paid’

means paid or credited as paid;

1.20 ‘participate’

in relation to a Directors’ meeting, has the meaning given in Article 15;

1.21 ‘Permitted Registered Society’

‘registered society’ means – a. a registered society within the meaning given by section 1(1) of the Co-operative and Community Benefit Societies Act 2014; or b. a society registered or deemed to be registered under the Industrial and provident Societies Act (Northern Ireland) 1969;

1.22 ‘Proxy Notice’

has the meaning given in Article 42;

1.23 ‘the Regulator’

means the Regulator of Community Interest Companies;

1.24 ‘Secretary’

the secretary of the Company (if any);

1.25 ‘specified’

means specified in the articles of association of the Company for the purposes of this paragraph;

1.26 ‘subsidiary’

has the meaning given in section 1159 of the Companies Act 2006;

1.27 ‘transfer’

includes every description of disposition, payment, release or distribution, and the creation or extinction of an estate or interest in, or right over, any property; and

1.28 ‘Writing’

the representation or reproduction of words, symbols or other information in a visible form by any method or combination of methods, whether sent or supplied in Electronic Form or otherwise. 495

Appendix J

Constitution of a Charitable Incorporated Organisation with Voting Members Other Than its Charity Trustees

‘Association’ Model Constitution1 Date of constitution (last amended): ……………………………………………………………………………………………… 1. Name The name of the Charitable Incorporated Organisation (‘the CIO’) is ……………………………………………………………………………………………… 2. National location of principal office The CIO must have a principal office in England or Wales. The principal office of the CIO is in [England][Wales]. 3. Object[s] The object[s] of the CIO [is][are] ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… Nothing in this constitution shall authorise an application of the property of the CIO for the purposes which are not charitable in accordance with [section 7 of the Charities and Trustee Investment (Scotland) Act 2005] and [section 2 of the Charities Act (Northern Ireland) 2008] 1

This constitution was published by the Charity Commission for England and Wales on 1  October 2016 https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/778241/Association_Model_Constitution.pdf.

497

Appendix J  Constitution of a Charitable Incorporated Organisation 4. Powers The CIO has power to do anything which is calculated to further its object[s] or is conducive or incidental to doing so. In particular, the CIO’s powers include power to: (1) borrow money and to charge the whole or any part of its property as security for the repayment of the money borrowed. The CIO must comply as appropriate with sections 124 and 125 of the Charities Act 2011 if it wishes to mortgage land; (2)

buy, take on lease or in exchange, hire or otherwise acquire any property and to maintain and equip it for use;

(3)

sell, lease or otherwise dispose of all or any part of the property belonging to the CIO. In exercising this power, the CIO must comply as appropriate with sections 117 and 119-123 of the Charities Act 2011;

(4)

employ and remunerate such staff as are necessary for carrying out the work of the CIO. The CIO may employ or remunerate a charity trustee only to the extent that it is permitted to do so by clause 6 (Benefits and payments to charity trustees and connected persons) and provided it complies with the conditions of those clauses;

(5) deposit or invest funds, employ a professional fund-manager, and arrange for the investments or other property of the CIO to be held in the name of a nominee, in the same manner and subject to the same conditions as the trustees of a trust are permitted to do by the Trustee Act 2000; 5. Application of income and property (1) The income and property of the CIO must be applied solely towards the promotion of the objects. (a)

A charity trustee is entitled to be reimbursed from the property of the CIO or may pay out of such property reasonable expenses properly incurred by him or her when acting on behalf of the CIO.

(b) A charity trustee may benefit from trustee indemnity insurance cover purchased at the CIO’s expense in accordance with, and subject to the conditions in, section 189 of the Charities Act 2011. (2) None of the income or property of the CIO may be paid or transferred directly or indirectly by way of dividend, bonus or otherwise by way of profit to any member of the CIO. This does not prevent a member who is not also a charity trustee receiving: (a)

a benefit from the CIO as a beneficiary of the CIO;

(b)

reasonable and proper remuneration for any goods or services supplied to the CIO.

(3) Nothing in this clause shall prevent a charity trustee or connected person receiving any benefit or payment which is authorised by Clause 6. 6. Benefits and payments to charity trustees and connected persons (1) General provisions No charity trustee or connected person may: 498

Constitution of a Charitable Incorporated Organisation  Appendix J (a)

buy or receive any goods or services from the CIO on terms preferential to those applicable to members of the public;

(b)

sell goods, services, or any interest in land to the CIO;

(c)

be employed by, or receive any remuneration from, the CIO;

(d)

receive any other financial benefit from the CIO;

unless the payment or benefit is permitted by sub-clause (2) of this clause, or authorised by the court or the prior written consent of the Charity Commission (‘the Commission’) has been obtained. In this clause, a ‘financial benefit’ means a benefit, direct or indirect, which is either money or has a monetary value. (2) Scope and powers permitting trustees’ or connected persons’ benefits (a)

A charity trustee or connected person may receive a benefit from the CIO as a beneficiary of the CIO provided that a majority of the trustees do not benefit in this way.

(b)

A charity trustee or connected person may enter into a contract for the supply of services, or of goods that are supplied in connection with the provision of services, to the CIO where that is permitted in accordance with, and subject to the conditions in, section 185 to 188 of the Charities Act 2011.

(c)

Subject to sub-clause (3) of this clause a charity trustee or connected person may provide the CIO with goods that are not supplied in connection with services provided to the CIO by the charity trustee or connected person.

(d)

A charity trustee or connected person may receive interest on money lent to the CIO at a reasonable and proper rate which must be not more than the Bank of England bank rate (also known as the base rate).

(e)

A charity trustee or connected person may receive rent for premises let by the trustee or connected person to the CIO. The amount of the rent and the other terms of the lease must be reasonable and proper. The charity trustee concerned must withdraw from any meeting at which such a proposal or the rent or other terms of the lease are under discussion.

(f)

A charity trustee or connected person may take part in the normal trading and fundraising activities of the CIO on the same terms as members of the public.

(3) Payment for supply of goods only – controls The CIO and its charity trustees may only rely upon the authority provided by subclause (2)(c) of this clause if each of the following conditions is satisfied: (a)

The amount or maximum amount of the payment for the goods is set out in a written agreement between the CIO and the charity trustee or connected person supplying the goods (‘the supplier’).

(b) The amount or maximum amount of the payment for the goods does not exceed what is reasonable in the circumstances for the supply of the goods in question. (c)

The other charity trustees are satisfied that it is in the best interests of the CIO to contract with the supplier rather than with someone who is not a charity trustee or connected person. In reaching that decision the charity trustees must balance the advantage of contracting with a charity trustee or connected person against the disadvantages of doing so. 499

Appendix J  Constitution of a Charitable Incorporated Organisation (d)

The supplier is absent from the part of any meeting at which there is discussion of the proposal to enter into a contract or arrangement with him or her or it with regard to the supply of goods to the CIO.

(e)

The supplier does not vote on any such matter and is not to be counted when calculating whether a quorum of charity trustees is present at the meeting.

(f)

The reason for their decision is recorded by the charity trustees in the minute book.

(g) A  majority of the charity trustees then in office are not in receipt of remuneration or payments authorised by clause 6. (4) In sub-clauses (2) and (3) of this clause: (a)

‘the CIO’ includes any company in which the CIO: (i)

holds more than 50% of the shares; or

(ii)

controls more than 50% of the voting rights attached to the shares; or

(iii) has the right to appoint one or more directors to the board of the company; (b)

‘connected person’ includes any person within the definition set out in clause [30] (Interpretation);

7. Conflicts of interest and conflicts of loyalty A charity trustee must: (1) declare the nature and extent of any interest, direct or indirect, which he or she has in a proposed transaction or arrangement with the CIO or in any transaction or arrangement entered into by the CIO which has not previously been declared; and (2)

absent himself or herself from any discussions of the charity trustees in which it is possible that a conflict of interest will arise between his or her duty to act solely in the interests of the CIO and any personal interest (including but not limited to any financial interest).

Any charity trustee absenting himself or herself from any discussions in accordance with this clause must not vote or be counted as part of the quorum in any decision of the charity trustees on the matter. 8. Liability of members to contribute to the assets of the CIO if it is wound up Option 1 If the CIO is wound up, the members of the CIO have no liability to contribute to its assets and no personal responsibility for settling its debts and liabilities. Option 2 (1) If the CIO is wound up, each member of the CIO is liable to contribute to the assets of the CIO such amount (but not more than £[…]) as may be required for payment of the debts and liabilities of the CIO contracted before that person or organisation ceases to be a member, for payment of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributing members among themselves. 500

Constitution of a Charitable Incorporated Organisation  Appendix J (2)

In sub-clause (1) of this clause ‘member’ includes any person or organisation that was a member of the CIO within 12 months before the commencement of the winding up.

(3) But subject to that, the members of the CIO have no liability to contribute to its assets if it is wound up, and accordingly have no personal responsibility for the settlement of its debts and liabilities beyond the amount that they are liable to contribute. 9. Membership of the CIO (1) Admission of new members (a)

Eligibility Membership of the CIO is open to anyone who is interested in furthering its purposes, and who, by applying for membership, has indicated his, her or its agreement to become a member and acceptance of the duty of members set out in sub-clause (3) of this clause. A  member may be an individual, a corporate body, or [an individual or corporate body representing] an organisation which is not incorporated.

(b)

Admission procedure The charity trustees: (i)

may require applications for membership to be made in any reasonable way that they decide;

(ii) [shall, if they approve an application for membership, notify the applicant of their decision within [21 days];] (iii) may refuse an application for membership if they believe that it is in the best interests of the CIO for them to do so; (iv) shall, if they decide to refuse an application for membership, give the applicant their reasons for doing so, within [21 days] of the decision being taken, and give the applicant the opportunity to appeal against the refusal; and (v)

shall give fair consideration to any such appeal, and shall inform the applicant of their decision, but any decision to confirm refusal of the application for membership shall be final.

(2) Transfer of membership Membership of the CIO cannot be transferred to anyone else [except in the case of an individual or corporate body representing an organisation which is not incorporated, whose membership may be transferred by the unincorporated organisation to a new representative. Such transfer of membership does not take effect until the CIO has received written notification of the transfer]. (3) Duty of members It is the duty of each member of the CIO to exercise his or her powers as a member of the CIO in the way he or she decides in good faith would be most likely to further the purposes of the CIO. 501

Appendix J  Constitution of a Charitable Incorporated Organisation (4) Termination of membership (a)

Membership of the CIO comes to an end if: (i)

the member dies, or, in the case of an organisation (or the representative of an organisation) that organisation ceases to exist; or

(ii)

the member sends a notice of resignation to the charity trustees; or

(iii) any sum of money owed by the member to the CIO is not paid in full within six months of its falling due; or (iv) the charity trustees decide that it is in the best interests of the CIO that the member in question should be removed from membership, and pass a resolution to that effect. (b) Before the charity trustees take any decision to remove someone from membership of the CIO they must: (i)

inform the member of the reasons why it is proposed to remove him, her or it from membership;

(ii) give the member at least 21 clear days’ notice in which to make representations to the charity trustees as to why he, she or it should not be removed from membership; (iii) at a duly constituted meeting of the charity trustees, consider whether or not the member should be removed from membership; (iv) consider at that meeting any representations which the member makes as to why the member should not be removed; and (v) allow the member, or the member’s representative, to make those representations in person at that meeting, if the member so chooses. (5) Membership fees The CIO may require members to pay reasonable membership fees to the CIO. [(6) Informal or associate (non-voting) membership (a) The charity trustees may create associate or other classes of non-voting membership, and may determine the rights and obligations of any such members (including payment of membership fees), and the conditions for admission to, and termination of membership of any such class of members. (b)

Other references in this constitution to ‘members’ and ‘membership’ do not apply to non-voting members, and non-voting members do not qualify as members for any purpose under the Charities Acts, General Regulations or Dissolution Regulations.]

10. Members’ decisions (1) General provisions Except for those decisions that must be taken in a particular way as indicated in sub-clause (4) of this clause, decisions of the members of the CIO may be taken either by vote at a general meeting as provided in sub-clause (2) of this clause or by written resolution as provided in sub-clause (3) of this clause. 502

Constitution of a Charitable Incorporated Organisation  Appendix J (2) Taking ordinary decisions by vote Subject to sub-clause (4) of this clause, any decision of the members of the CIO may be taken by means of a resolution at a general meeting. Such a resolution may be passed by a simple majority of votes cast at the meeting [(including votes cast by postal or email ballot, and proxy votes)]. (3) Taking ordinary decisions by written resolution without a general meeting (a) Subject to sub-clause (4) of this clause, a resolution in writing agreed by a simple majority of all the members who would have been entitled to vote upon it had it been proposed at a general meeting shall be effective, provided that: (i)

a copy of the proposed resolution has been sent to all the members eligible to vote; and

(ii) a simple majority of members has signified its agreement to the resolution in a document or documents which are received at the principal office within the period of 28 days beginning with the circulation date. The document signifying a member’s agreement must be authenticated by their signature (or in the case of an organisation which is a member, by execution according to its usual procedure), by a statement of their identity accompanying the document, or in such other manner as the CIO has specified. (b) The resolution in writing may comprise several copies to which one or more members has signified their agreement. (c)

Eligibility to vote on the resolution is limited to members who are members of the CIO on the date when the proposal is first circulated in accordance with paragraph (a) above.

(d) Not less than 10% of the members of the CIO may request the charity trustees to make a proposal for decision by the members. (e)

The charity trustees must within 21 days of receiving such a request comply with it if: (i)

The proposal is not frivolous or vexatious, and does not involve the publication of defamatory material;

(ii)

The proposal is stated with sufficient clarity to enable effect to be given to it if it is agreed by the members; and

(iii) Effect can lawfully be given to the proposal if it is so agreed. (f)

Sub-clauses (a) to (c) of this clause apply to a proposal made at the request of the members.

(4) Decisions that must be taken in a particular way [(a) Any decision to remove a trustee must be taken in accordance with clause [15(2)].] (b) Any decision to amend this constitution must be taken in accordance with clause [28] of this constitution (Amendment of Constitution). (c)

Any decision to wind up or dissolve the CIO must be taken in accordance with clause [29] of this constitution (Voluntary winding up or dissolution). 503

Appendix J  Constitution of a Charitable Incorporated Organisation Any decision to amalgamate or transfer the undertaking of the CIO to one or more other CIOs must be taken in accordance with the provisions of the Charities Act 2011. 11. General meetings of members (1) Types of general meeting There must be an annual general meeting (AGM) of the members of the CIO. The first AGM must be held within 18 months of the registration of the CIO, and subsequent AGMs must be held at intervals of not more than 15 months. The AGM must receive the annual statement of accounts (duly audited or examined where applicable) and the trustees’ annual report, and must elect trustees as required under clause [13]. Other general meetings of the members of the CIO may be held at any time. All general meetings must be held in accordance with the following provisions. (2) Calling general meetings (a)

The charity trustees: (i)

must call the annual general meeting of the members of the CIO in accordance with sub-clause (1) of this clause, and identify it as such in the notice of the meeting; and

(ii)

may call any other general meeting of the members at any time.

(b) The charity trustees must, within 21 days, call a general meeting of the members of the CIO if: (i)

they receive a request to do so from at least 10% of the members of the CIO; and

(ii)

the request states the general nature of the business to be dealt with at the meeting, and is authenticated by the member(s) making the request.

(c)

If, at the time of any such request, there has not been any general meeting of the members of the CIO for more than 12 months, then sub-clause (b)(i) of this clause shall have effect as if 5% were substituted for 10%.

(d)

Any such request may include particulars of a resolution that may properly be proposed, and is intended to be proposed, at the meeting.

(e) A  resolution may only properly be proposed if it is lawful, and is not defamatory, frivolous or vexatious. (f)

Any general meeting called by the charity trustees at the request of the members of the CIO must be held within 28 days from the date on which it is called.

(g) If the charity trustees fail to comply with this obligation to call a general meeting at the request of its members, then the members who requested the meeting may themselves call a general meeting. (h) A general meeting called in this way must be held not more than 3 months after the date when the members first requested the meeting. 504

Constitution of a Charitable Incorporated Organisation  Appendix J (i)

The CIO must reimburse any reasonable expenses incurred by the members calling a general meeting by reason of the failure of the charity trustees to duly call the meeting, but the CIO shall be entitled to be indemnified by the charity trustees who were responsible for such failure.

(3) Notice of general meetings (a)

The charity trustees, or, as the case may be, the relevant members of the CIO, must give at least 14 clear days’ notice of any general meeting to all of the members, and to any charity trustee of the CIO who is not a member.

(b)

If it is agreed by not less than 90% of all members of the CIO, any resolution may be proposed and passed at the meeting even though the requirements of sub-clause (3) (a) of this clause have not been met. This sub-clause does not apply where a specified period of notice is strictly required by another clause in this constitution, by the Charities Act 2011 or by the General Regulations.

(c)

The notice of any general meeting must: (i)

state the time and date of the meeting;

(ii)

give the address at which the meeting is to take place;

(iii) give particulars of any resolution which is to be moved at the meeting, and of the general nature of any other business to be dealt with at the meeting; and (iv) if a proposal to alter the constitution of the CIO is to be considered at the meeting, include the text of the proposed alteration; (v)

include, with the notice for the AGM, the annual statement of accounts and trustees’ annual report, details of persons standing for election or re-election as trustee, or where allowed under clause [22] (Use of electronic communication), details of where the information may be found on the CIO’s website.

(d) Proof that an envelope containing a notice was properly addressed, prepaid and posted; or that an electronic form of notice was properly addressed and sent, shall be conclusive evidence that the notice was given. Notice shall be deemed to be given 48 hours after it was posted or sent. (e) The proceedings of a meeting shall not be invalidated because a member who was entitled to receive notice of the meeting did not receive it because of accidental omission by the CIO. (4) Chairing of general meetings The person nominated as chair by the charity trustees under clause [19](2) (Chairing meetings), shall, if present at the general meeting and willing to act, preside as chair of the meeting. Subject to that, the members of the CIO who are present at a general meeting shall elect a chair to preside at the meeting. (5) Quorum at general meetings (a)

No business may be transacted at any general meeting of the members of the CIO unless a quorum is present when the meeting starts.

(b) Subject to the following provisions, the quorum for general meetings shall be the greater of [5]% or [three] members. An organisation represented by a person present at the meeting in accordance with sub-clause (7) of this clause, is counted as being present in person. 505

Appendix J  Constitution of a Charitable Incorporated Organisation (c)

If the meeting has been called by or at the request of the members and a quorum is not present within 15 minutes of the starting time specified in the notice of the meeting, the meeting is closed.

(d)

If the meeting has been called in any other way and a quorum is not present within 15 minutes of the starting time specified in the notice of the meeting, the chair must adjourn the meeting. The date, time and place at which the meeting will resume must [either be announced by the chair or] be notified to the CIO’s members at least seven clear days before the date on which it will resume.

(e)

If a quorum is not present within 15 minutes of the start time of the adjourned meeting, the member or members present at the meeting constitute a quorum.

(f)

If at any time during the meeting a quorum ceases to be present, the meeting may discuss issues and make recommendations to the trustees but may not make any decisions. If decisions are required which must be made by a meeting of the members, the meeting must be adjourned.

(6) Voting at general meetings (a) Any decision other than one falling within clause [10(4)] (Decisions that must be taken in a particular way) shall be taken by a simple majority of votes cast at the meeting [(including proxy and postal votes)]. Every member has one vote [unless otherwise provided in the rights of a particular class of membership under this constitution]. (b) A  resolution put to the vote of a meeting shall be decided on a show of hands, unless (before or on the declaration of the result of the show of hands) a poll is duly demanded. A poll may be demanded by the chair or by at least 10% of the members present in person or by proxy at the meeting. (c)

A poll demanded on the election of a person to chair the meeting or on a question of adjournment must be taken immediately. A  poll on any other matter shall be taken, and the result of the poll shall be announced, in such manner as the chair of the meeting shall decide, provided that the poll must be taken, and the result of the poll announced, within 30 days of the demand for the poll.

(d)

A poll may be taken: (i)

at the meeting at which it was demanded; or

(ii)

at some other time and place specified by the chair; or

(iii) through the use of postal or electronic communications. [(e) In the event of an equality of votes, whether on a show of hands or on a poll, the chair of the meeting shall have a second, or casting vote.] (f)

Any objection to the qualification of any voter must be raised at the meeting at which the vote is cast and the decision of the chair of the meeting shall be final.

(7) Representation of [organisations and] corporate members A[n organisation or a]corporate body that is a member of the CIO may, in accordance with its usual decision-making process, authorise a person to act as its representative at any general meeting of the CIO. 506

Constitution of a Charitable Incorporated Organisation  Appendix J The representative is entitled to exercise the same powers on behalf of the [organisation or] corporate body as the [organisation or] corporate body could exercise as an individual member of the CIO. (8) Adjournment of meetings The chair may with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting to another time and/or place. No business may be transacted at an adjourned meeting except business which could properly have been transacted at the original meeting. 12. Charity trustees (1) Functions and duties of charity trustees The charity trustees shall manage the affairs of the CIO and may for that purpose exercise all the powers of the CIO. It is the duty of each charity trustee: (a)

to exercise his or her powers and to perform his or her functions as a trustee of the CIO in the way he or she decides in good faith would be most likely to further the purposes of the CIO; and

(b) to exercise, in the performance of those functions, such care and skill as is reasonable in the circumstances having regard in particular to: (i)

any special knowledge or experience that he or she has or holds himself or herself out as having; and

(ii) if he or she acts as a charity trustee of the CIO in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession. (2) Eligibility for trusteeship (a)

Every charity trustee must be a natural person.

(b)

No one may be appointed as a charity trustee:

(c)

•

if he or she is under the age of 16 years; or

•

if he or she would automatically cease to hold office under the provisions of clause [15(1)(f)].

No one is entitled to act as a charity trustee whether on appointment or on any re-appointment until he or she has expressly acknowledged, in whatever way the charity trustees decide, his or her acceptance of the office of charity trustee.

[(d) At least one of the trustees of the CIO must be 18 years of age or over. If there is no trustee aged at least 18 years, the remaining trustee or trustees may act only to call a meeting of the charity trustees, or appoint a new charity trustee.] (3) Number of charity trustees Option 1 (a)

There must be at least [three] charity trustees. If the number falls below this minimum, the remaining trustee or trustees may act only to call a meeting of the charity trustees, or appoint a new charity trustee. 507

Appendix J  Constitution of a Charitable Incorporated Organisation Option 1a (b) The maximum number of charity trustees is [12]. The charity trustees may not appoint any charity trustee if as a result the number of charity trustees would exceed the maximum. Option 1b (b) There is no maximum number of charity trustees that may be appointed to the CIO. Option 2 (a)

There should be: [Not less than… nor more than]… elected trustees; [… ex officio trustee[s]; and [Not less than… nor more than]… nominated trustees].

(b) There must be at least [three] charity trustees. If the number falls below this minimum, the remaining trustee or trustees may act only to call a meeting of the charity trustees, or appoint a new charity trustee. (c) The maximum number of charity trustees that can be appointed is as provided in sub-clause (a) of this clause. No trustee appointment may be made in excess of these provisions. (4) First charity trustees The first charity trustees of the CIO are – ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… 13. Appointment of charity trustees Option 1 [(1) At the first annual general meeting of the members of the CIO all the charity trustees shall retire from office;] (2) At every [subsequent] annual general meeting of the members of the CIO, one-third of the charity trustees shall retire from office. If the number of charity trustees is not three or a multiple of three, then the number nearest to one-third shall retire from office, but if there is only one charity trustee, he or she shall retire; (3)

The charity trustees to retire by rotation shall be those who have been longest in office since their last appointment or reappointment. If any trustees were last appointed or reappointed on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot;

(4) The vacancies so arising may be filled by the decision of the members at the annual general meeting; any vacancies not filled at the annual general meeting may be filled as provided in sub-clause (5) of this clause; 508

Constitution of a Charitable Incorporated Organisation  Appendix J (5)

The members or the charity trustees may at any time decide to appoint a new charity trustee, whether in place of a charity trustee who has retired or been removed in accordance with clause [15] (Retirement and removal of charity trustees), or as an additional charity trustee, provided that the limit specified in clause [12(3)] on the number of charity trustees would not as a result be exceeded;

(6)

A person so appointed by the members of the CIO shall retire in accordance with the provisions of sub-clauses (2) and (3) of this clause. A  person so appointed by the charity trustees shall retire at the conclusion of the next annual general meeting after the date of his or her appointment, and shall not be counted for the purpose of determining which of the charity trustees is to retire by rotation at that meeting.

Option 2 (1)

Elected charity trustees [(a) At the first annual general meeting of the members of the CIO all the elected charity trustees shall retire from office;] (b) At every [subsequent] annual general meeting of the members of the CIO, one-third of the elected charity trustees shall retire from office. If the number of elected charity trustees is not three or a multiple of three, then the number nearest to one-third shall retire from office, but if there is only one charity trustee, he or she shall retire; (c)

The charity trustees to retire by rotation shall be those who have been longest in office since their last appointment or reappointment. If any trustees were last appointed or reappointed on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot;

(d) The vacancies so arising may be filled by the decision of the members at the annual general meeting; any vacancies not filled at the annual general meeting may be filled as provided in sub-clause (e) of this clause; (e)

The members or the charity trustees may at any time decide to appoint a new charity trustee, whether in place of a charity trustee who has retired or been removed in accordance with clause [15] (Retirement and removal of charity trustees), or as an additional charity trustee, provided that the limit specified in clause [12(3)] on the number of charity trustees would not as a result be exceeded;

(f)

A  person so appointed by the members of the CIO shall retire in accordance with the provisions of sub-clauses (b) and (c) of this clause. A person so appointed by the charity trustees shall retire at the conclusion of the annual general meeting next following the date of his appointment, and shall not be counted for the purpose of determining which of the charity trustees is to retire by rotation at that meeting.

[(2) Ex officio charity trustee[s] The [insert role] for the time being (‘the office holder’) shall automatically, by virtue of holding that office (‘ex officio’), be a charity trustee. If unwilling to act as a charity trustee, the office holder may: 509

Appendix J  Constitution of a Charitable Incorporated Organisation (a)

before accepting appointment as a charity trustee, give notice in writing to the trustees of his or her unwillingness to act in that capacity; or

(b) after accepting appointment as a charity trustee, resign under the provisions contained in clause 15 (Retirement and removal of charity trustees). The office of ex officio charity trustee will then remain vacant until the office holder ceases to hold office.] [(3) Nominated charity trustee[s] (a)

[insert name of appointing body] (‘the appointing body’) may appoint [insert number] charity trustees.

(b) Any appointment must be made at a meeting held according to the ordinary practice of the appointing body. (c)

Each appointment must be for a term of [3] years.

(d)

The appointment will be effective from the later of: (i)

the date of the vacancy; or

(ii)

the date on which the CIO is informed of the appointment.

(e)

The person appointed need not be a member of the appointing body.

(f)

A trustee appointed by the appointing body has the same duty under Clause 12(1) as the other charity trustees to act in the way he or she decides in good faith would be most likely to further the purposes of the CIO.]

14. Information for new charity trustees The charity trustees will make available to each new charity trustee, on or before his or her first appointment: (a)

a copy of this constitution and any amendments made to it; and

(b)

a copy of the CIO’s latest trustees’ annual report and statement of accounts.

15. Retirement and removal of charity trustees (1)

A charity trustee ceases to hold office if he or she: (a) retires by notifying the CIO in writing (but only if enough charity trustees will remain in office when the notice of resignation takes effect to form a quorum for meetings); (b) is absent without the permission of the charity trustees from all their meetings held within a period of six months and the trustees resolve that his or her office be vacated; (c)  dies; (d) in the written opinion, given to the CIO, of a registered medical practitioner treating that person, has become physically or mentally incapable of acting as a trustee and may remain so for more than three months; (e)

[is removed by the members of the CIO in accordance with sub-clause (2) of this clause;] or 510

Constitution of a Charitable Incorporated Organisation  Appendix J (f)

is disqualified from acting as a charity trustee by virtue of section 178-180 of the Charities Act 2011 (or any statutory re-enactment or modification of that provision).

[(2) A charity trustee shall be removed from office if a resolution to remove that trustee is proposed at a general meeting of the members called for that purpose and properly convened in accordance with clause [11], and the resolution is passed by a [two-thirds] majority of votes cast at the meeting. (3) A resolution to remove a charity trustee in accordance with this clause shall not take effect unless the individual concerned has been given at least 14 clear days’ notice in writing that the resolution is to be proposed, specifying the circumstances alleged to justify removal from office, and has been given a reasonable opportunity of making oral and/or written representations to the members of the CIO.] 16. Reappointment of charity trustees Any person who retires as a charity trustee by rotation or by giving notice to the CIO is eligible for reappointment. [A  charity trustee who has served for [three] consecutive terms may not be reappointed for a [fourth] consecutive term but may be reappointed after an interval of at least [three years].] 17. Taking of decisions by charity trustees Any decision may be taken either: •

at a meeting of the charity trustees; or

•

by resolution in writing [or electronic form] agreed by a majority of all of the charity trustees, which may comprise either a single document or several documents containing the text of the resolution in like form to which the majority of all of the charity trustees has signified their agreement. Such a resolution shall be effective provided that: •

a copy of the proposed resolution has been sent, at or as near as reasonably practicable to the same time, to all of the charity trustees; and

•

the majority of all of the charity trustees has signified agreement to the resolution in a document or documents which has or have been authenticated by their signature, by a statement of their identity accompanying the document or documents, or in such other manner as the charity trustees have previously resolved, and delivered to the CIO at its principal office or such other place as the trustees may resolve [within 28 days of the circulation date].

18. Delegation by charity trustees (1) The charity trustees may delegate any of their powers or functions to a committee or committees, and, if they do, they must determine the terms and conditions on which the delegation is made. The charity trustees may at any time alter those terms and conditions, or revoke the delegation. (2)

This power is in addition to the power of delegation in the General Regulations and any other power of delegation available to the charity trustees, but is subject to the following requirements – 511

Appendix J  Constitution of a Charitable Incorporated Organisation (a) a committee may consist of two or more persons, but at least one member of each committee must be a charity trustee; (b) the acts and proceedings of any committee must be brought to the attention of the charity trustees as a whole as soon as is reasonably practicable; and (c)

the charity trustees shall from time to time review the arrangements which they have made for the delegation of their powers.

19. Meetings and proceedings of charity trustees (1) Calling meetings (a)

Any charity trustee may call a meeting of the charity trustees.

(b)

Subject to that, the charity trustees shall decide how their meetings are to be called, and what notice is required.

(2) Chairing of meetings The charity trustees may appoint one of their number to chair their meetings and may at any time revoke such appointment. If no-one has been so appointed, or if the person appointed is unwilling to preside or is not present within 10 minutes after the time of the meeting, the charity trustees present may appoint one of their number to chair that meeting. (3) Procedure at meetings (a)

No decision shall be taken at a meeting unless a quorum is present at the time when the decision is taken. The quorum is [two] charity trustees, or the number nearest to [one third] of the total number of charity trustees, whichever is greater, or such larger number as the charity trustees may decide from time to time. A  charity trustee shall not be counted in the quorum present when any decision is made about a matter upon which he or she is not entitled to vote.

(b)

Questions arising at a meeting shall be decided by a majority of those eligible to vote.

[(c) In the case of an equality of votes, the chair shall have a second or casting vote.] (4) Participation in meetings by electronic means (a)

A meeting may be held by suitable electronic means agreed by the charity trustees in which each participant may communicate with all the other participants.

(b)

Questions arising at a meeting shall be decided by a majority of those eligible to vote.

[(c) In the case of an equality of votes, the chair shall have a second or casting vote.]

512

Constitution of a Charitable Incorporated Organisation  Appendix J 20. Saving provisions (1) Subject to sub-clause (2) of this clause, all decisions of the charity trustees, or of a committee of charity trustees, shall be valid notwithstanding the participation in any vote of a charity trustee: •

who was disqualified from holding office;

•

who had previously retired or who had been obliged by the constitution to vacate office;

•

who was not entitled to vote on the matter, whether by reason of a conflict of interest or otherwise;

if, without the vote of that charity trustee and that charity trustee being counted in the quorum, the decision has been made by a majority of the charity trustees at a quorate meeting. (2) Sub-clause (1) of this clause does not permit a charity trustee to keep any benefit that may be conferred upon him or her by a resolution of the charity trustees or of a committee of charity trustees if, but for clause (1), the resolution would have been void, or if the charity trustee has not complied with clause 7 (Conflicts of interest). 21. Execution of documents (1)

The CIO shall execute documents either by signature or by affixing its seal (if it has one).

(2) A document is validly executed by signature if it is signed by at least two of the charity trustees. (3)

If the CIO has a seal: (a)

it must comply with the provisions of the General Regulations; and

(b) it must only be used by the authority of the charity trustees or of a committee of charity trustees duly authorised by the charity trustees. The charity trustees may determine who shall sign any document to which the seal is affixed and unless otherwise determined it shall be signed by two charity trustees. 22. Use of electronic communications [(1) General] The CIO will comply with the requirements of the Communications Provisions in the General Regulations and in particular: (a)

the requirement to provide within 21 days to any member on request a hard copy of any document or information sent to the member otherwise than in hard copy form;

(b) any requirements to provide information to the Commission in a particular form or manner. 23. Keeping of Registers The CIO must comply with its obligations under the General Regulations in relation to the keeping of, and provision of access to, registers of its members and charity trustees. 513

Appendix J  Constitution of a Charitable Incorporated Organisation 24. Minutes The charity trustees must keep minutes of all: (1)

appointments of officers made by the charity trustees;

(2)

proceedings at general meetings of the CIO;

(3)

meetings of the charity trustees and committees of charity trustees including:

(4)

•

the names of the trustees present at the meeting;

•

the decisions made at the meetings; and

•

where appropriate the reasons for the decisions;

decisions made by the charity trustees otherwise than in meetings.

25. Accounting records, accounts, annual reports and returns, register maintenance (1)

The charity trustees must comply with the requirements of the Charities Act 2011 with regard to the keeping of accounting records, to the preparation and scrutiny of statements of accounts, and to the preparation of annual reports and returns. The statements of accounts, reports and returns must be sent to the Charity Commission, regardless of the income of the CIO, within 10 months of the financial year end.

(2) The charity trustees must comply with their obligation to inform the Commission within 28 days of any change in the particulars of the CIO entered on the Central Register of Charities. 26. Rules The charity trustees may from time to time make such reasonable and proper rules or bye laws as they may deem necessary or expedient for the proper conduct and management of the CIO, but such rules or bye laws must not be inconsistent with any provision of this constitution. Copies of any such rules or bye laws currently in force must be made available to any member of the CIO on request. 27. Disputes If a dispute arises between members of the CIO about the validity or propriety of anything done by the members under this constitution, and the dispute cannot be resolved by agreement, the parties to the dispute must first try in good faith to settle the dispute by mediation before resorting to litigation. 28. Amendment of constitution As provided by clauses 224-227 of the Charities Act 2011: (1)

This constitution can only be amended: (a)

by resolution agreed in writing by all members of the CIO; or

(b) by a resolution passed by a 75% majority of votes cast at a general meeting of the members of the CIO. (2) Any alteration of clause 3 (Objects), clause [29] (Voluntary winding up or dissolution), this clause, or of any provision where the alteration would provide authorisation for any benefit to be obtained by charity trustees or 514

Constitution of a Charitable Incorporated Organisation  Appendix J members of the CIO or persons connected with them, requires the prior written consent of the Charity Commission. (3) No amendment that is inconsistent with the provisions of the Charities Act 2011 or the General Regulations shall be valid. (4) A copy of any resolution altering the constitution, together with a copy of the CIO’s constitution as amended, must be sent to the Commission within 15 days from the date on which the resolution is passed. The amendment does not take effect until it has been recorded in the Register of Charities. 29. Voluntary winding up or dissolution (1) As provided by the Dissolution Regulations, the CIO may be dissolved by resolution of its members. Any decision by the members to wind up or dissolve the CIO can only be made: (a)

at a general meeting of the members of the CIO called in accordance with clause [11] (Meetings of Members), of which not less than 14 days’ notice has been given to those eligible to attend and vote: (i)

by a resolution passed by a 75% majority of those voting, or

(ii) by a resolution passed by decision taken without a vote and without any expression of dissent in response to the question put to the general meeting; or (b) (2)

by a resolution agreed in writing by all members of the CIO.

Subject to the payment of all the CIO’s debts: (a)

Any resolution for the winding up of the CIO, or for the dissolution of the CIO without winding up, may contain a provision directing how any remaining assets of the CIO shall be applied.

(b)

If the resolution does not contain such a provision, the charity trustees must decide how any remaining assets of the CIO shall be applied.

(c) In either case the remaining assets must be applied for charitable purposes the same as or similar to those of the CIO. (3) The CIO must observe the requirements of the Dissolution Regulations in applying to the Commission for the CIO to be removed from the Register of Charities, and in particular: (a)

the charity trustees must send with their application to the Commission: (i)

a copy of the resolution passed by the members of the CIO;

(ii) a declaration by the charity trustees that any debts and other liabilities of the CIO have been settled or otherwise provided for in full; and (iii) a statement by the charity trustees setting out the way in which any property of the CIO has been or is to be applied prior to its dissolution in accordance with this constitution; (b) the charity trustees must ensure that a copy of the application is sent within seven days to every member and employee of the CIO, and to any charity trustee of the CIO who was not privy to the application. 515

Appendix J  Constitution of a Charitable Incorporated Organisation (4) If the CIO is to be wound up or dissolved in any other circumstances, the provisions of the Dissolution Regulations must be followed. 30. Interpretation In this constitution: connected person’ means: (a)

a child, parent, grandchild, grandparent, brother or sister of the charity trustee;

(b)

the spouse or civil partner of the charity trustee or of any person falling within sub-clause (a) above;

(c)

a person carrying on business in partnership with the charity trustee or with any person falling within sub-clause (a) or (b) above;

(d)

an institution which is controlled – (i)

by the charity trustee or any connected person falling within subclause (a), (b), or (c) above; or

(ii) by two or more persons falling within sub-clause (d)(i), when taken together (e)

a body corporate in which – (i)

the charity trustee or any connected person falling within subclauses (a) to (c) has a substantial interest; or

(ii)

two or more persons falling within sub-clause (e)(i) who, when taken together, have a substantial interest.

Section 118 of the Charities Act 2011 applies for the purposes of interpreting the terms used in this constitution. General Regulations’ means the Charitable Incorporated Organisations (General) Regulations 2012. Dissolution Regulations’ means the Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012. The ‘Communications Provisions’ means the Communications Provisions in [Part 9, Chapter 4] of the General Regulations. charity trustee’ means a charity trustee of the CIO. A ‘poll’ means a counted vote or ballot, usually (but not necessarily) in writing.

Appendix The following provisions do not form part of the ‘Association’ model constitution but are available as options under clauses 11 (General meetings of members) and 22 (Use of electronic communications). For CIOs intending to include these powers in their constitutions, we recommend that you use the following wording. Notes on these clauses are included with the explanatory notes accompanying the clauses in the model. 516

Constitution of a Charitable Incorporated Organisation  Appendix J General meetings of members Proxy voting (a)

Any member of the CIO may appoint another person as a proxy to exercise all or any of that member’s rights to attend, speak and vote at a general meeting of the CIO. Proxies must be appointed by a notice in writing (a ‘proxy notice’) which: (i)

states the name and address of the member appointing the proxy;

(ii) identifies the person appointed to be that member’s proxy and the general meeting in relation to which that person is appointed; (iii) is signed by or on behalf of the member appointing the proxy, or is authenticated in such manner as the CIO may determine; and (iv) is delivered to the CIO in accordance with the constitution and any instructions contained in the notice of the general meeting to which they relate. (b) The CIO may require proxy notices to be delivered in a particular form, and may specify different forms for different purposes. (c)

Proxy notices may (but do not have to) specify how the proxy appointed under them is to vote (or that the proxy is to abstain from voting) on one or more resolutions.

(d)

Unless a proxy notice indicates otherwise, it must be treated as: (i)

allowing the person appointed under it as a proxy discretion as to how to vote on any ancillary or procedural resolutions put to the meeting; and

(ii)

appointing that person as a proxy in relation to any adjournment of the general meeting to which it relates as well as the meeting itself.

(e) A  member who is entitled to attend, speak or vote (either on a show of hands or on a poll) at a general meeting remains so entitled in respect of that meeting or any adjournment of it, even though a valid proxy notice has been delivered to the CIO by or on behalf of that member. (f)

An appointment under a proxy notice may be revoked by delivering to the CIO a notice in writing given by or on behalf of the member by whom or on whose behalf the proxy notice was given.

(g) A  notice revoking a proxy appointment only takes effect if it is delivered before the start of the meeting or adjourned meeting to which it relates. (h) If a proxy notice is not signed or authenticated by the member appointing the proxy, it must be accompanied by written evidence that the person who signed or authenticated it on that member’s behalf had authority to do so. Postal Voting (a)

The CIO may, if the charity trustees so decide, allow the members to vote by post or electronic mail (‘email’) to elect charity trustees or to make a decision on any matter that is being decided at a general meeting of the members.

(b) The charity trustees must appoint at least two persons independent of the CIO to serve as scrutineers to supervise the conduct of the postal/email ballot and the counting of votes. 517

Appendix J  Constitution of a Charitable Incorporated Organisation (c)

If postal and/or email voting is to be allowed on a matter, the CIO must send to members of the CIO not less than [21] days before the deadline for receipt of votes cast in this way: (i)

a notice by email, if the member has agreed to receive notices in this way under clause [22] (Use of electronic communications), including an explanation of the purpose of the vote and the voting procedure to be followed by the member, and a voting form capable of being returned by email or post to the CIO, containing details of the resolution being put to a vote, or of the candidates for election, as applicable;

(ii)

a notice by post to all other members, including a written explanation of the purpose of the postal vote and the voting procedure to be followed by the member; and a postal voting form containing details of the resolution being put to a vote, or of the candidates for election, as applicable.

(d) The voting procedure must require all forms returned by post to be in an envelope with the member’s name and signature, and nothing else, on the outside, inside another envelope addressed to ‘The Scrutineers for [name of CIO]’, at the CIO’s principal office or such other postal address as is specified in the voting procedure. (e) The voting procedure for votes cast by email must require the member’s name to be at the top of the email, and the email must be authenticated in the manner specified in the voting procedure. (f)

Email votes must be returned to an email address used only for this purpose and must be accessed only by a scrutineer.

(g) The voting procedure must specify the closing date and time for receipt of votes, and must state that any votes received after the closing date or not complying with the voting procedure will be invalid and not be counted. (h) The scrutineers must make a list of names of members casting valid votes, and a separate list of members casting votes which were invalid. These lists must be provided to a charity trustee or other person overseeing admission to, and voting at, the general meeting. A member who has cast a valid postal or email vote must not vote at the meeting, and must not be counted in the quorum for any part of the meeting on which he, she or it has already cast a valid vote. A member who has cast an invalid vote by post or email is allowed to vote at the meeting and counts towards the quorum. (i)

For postal votes, the scrutineers must retain the internal envelopes (with the member’s name and signature). For email votes, the scrutineers must cut off and retain any part of the email that includes the member’s name. In each case, a scrutineer must record on this evidence of the member’s name that the vote has been counted, or if the vote has been declared invalid, the reason for such declaration.

(j)

Votes cast by post or email must be counted by all the scrutineers before the meeting at which the vote is to be taken. The scrutineers must provide to the person chairing the meeting written confirmation of the number of valid votes received by post and email and the number of votes received which were invalid.

(k)

The scrutineers must not disclose the result of the postal/email ballot until after votes taken by hand or by poll at the meeting, or by poll after the 518

Constitution of a Charitable Incorporated Organisation  Appendix J meeting, have been counted. Only at this point shall the scrutineers declare the result of the valid votes received, and these votes shall be included in the declaration of the result of the vote. (l)

Following the final declaration of the result of the vote, the scrutineers must provide to a charity trustee or other authorised person bundles containing the evidence of members submitting valid postal votes; evidence of members submitting valid email votes; evidence of invalid votes; the valid votes; and the invalid votes.

(m) Any dispute about the conduct of a postal or email ballot must be referred initially to a panel set up by the charity trustees, to consist of two trustees and two persons independent of the CIO. If the dispute cannot be satisfactorily resolved by the panel, it must be referred to the Electoral Reform Services. Use of electronic communications To the CIO Any member or charity trustee of the CIO may communicate electronically with the CIO to an address specified by the CIO for the purpose, so long as the communication is authenticated in a manner which is satisfactory to the CIO. By the CIO (a)

Any member or charity trustee of the CIO, by providing the CIO with his or her email address or similar, is taken to have agreed to receive communications from the CIO in electronic form at that address, unless the member has indicated to the CIO his or her unwillingness to receive such communications in that form.

(b)

The charity trustees may, subject to compliance with any legal requirements, by means of publication on its website – (i)

provide the members with the notice referred to in clause 11(3)(Notice of general meetings);

(ii)

give charity trustees notice of their meetings in accordance with clause 19(1) (Calling meetings); [and

(iii) submit any proposal to the members or charity trustees for decision by written resolution or postal vote in accordance with the CIO’s powers under clause 10 (Members’ decisions), 10(3) (Decisions taken by resolution in writing), or [[the provisions for postal voting] (if you have included this optional provision, please insert the correct clause number here)]. (c)

The charity trustees must: (i)

take reasonable steps to ensure that members and charity trustees are promptly notified of the publication of any such notice or proposal;

(ii)

send any such notice or proposal in hard copy form to any member or charity trustee who has not consented to receive communications in electronic form.

519

Appendix K

Model Full Set of Rules for a Members’ Club

Rules of the Basset Sports Club1 Index Rule 1: Name Rule 2: Objects Rule 3: Sports defined Rule 4: Sporting rules Rule 5: President and Vice-Presidents Rule 6: Officers of the Club Rule 7: Trustees Rule 8: Membership Rule 9: Ordinary Members Rule 10: Honorary Members Rule 11: Social Members Rule 12: Junior Members Rule 13: Associate Members Rule 14: Temporary Members Rule 15: Election and Admission of members Rule 16: Membership list Rule 17: Members’ communication with the Club Rule 18: Entrance fee Rule 19: Subscriptions Rule 20: Resignation of a member Rule 21: Suspension and expulsion of a member Rule 22: Disciplinary proceedings 1 See 2.3 and 2.9.

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Appendix K  Model Full Set of Rules for a Members’ Club Rule 23: Management of the Club Rule 24: The Committee Rule 25: Sub-Committees Rule 26: Declaration of interest Rule 27: Indemnity Rule 28: Annual General Meeting Rule 29: Special meetings Rule 30: Procedure at meetings Rule 31: Electronic meetings Rule 32: Auditor Rule 33: Financial powers Rule 34: Guests and visitors Rule 35: Interpretation of the rules Rule 36: Amendment of the rules Rule 37: Dispute resolution Rule 38: Dissolution of the Club Note As stated in paragraph 2.1, ‘The club’s set of rules is the bedrock of club law’. The footnotes in this Appendix refer to the main text of the book in order to assist the understanding of and the need for the rules in question.

RULES 1. Name2 The club shall be called the Basset Sports Club (‘the Club’). 2. Objects3 The objects of the Club are: (1) to promote and provide for the benefit of members of the Club amenities for the pursuit of sporting activities and for social and recreational activities; (2) to promote fellowship amongst the members; (3) to foster links with, and to support and co-operate with other persons or organisations with similar objects as set out in this rule; (4) to do all things necessary for or incidental to or conducive to the attainment of the above-mentioned objects. 3. Sports defined The sports in which the Club is involved are cricket, tennis, hockey, squash and athletics.

2 See 2.12. 3 See 2.14.

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Model Full Set of Rules for a Members’ Club  Appendix K 4. Sporting rules The rules of the sports carried on by the Club shall be those rules adopted from time to time by the governing body of the sport in question. 5. President and Vice-Presidents4 (1) The nominations for the office of President shall be presented by the Committee to the members at the annual general meeting, and upon election by the members the President shall serve for a term of three years, but shall be eligible for re-election at the end of each term.5 (2) There shall from time to time be Vice-Presidents not exceeding three in number.6 The nominations for the office of Vice-President shall be presented by the Committee to the members at the annual general meeting, and upon election by the members the Vice-Presidents shall serve for a term of three years, renewable once only. After six years in office a Vice-President must stand down for a year before being eligible to be nominated as a Vice-President for a further term.7 (3) The office of Vice-President may be combined with another office.8 6. Officers of the Club9 (1) The officers of the Club shall consist of the President; such Vice-Presidents as elected in accordance with Rule 5(2); the Chairman of the Club;10 two Captains (Men/Women); two Vice-Captains (Men/Women); the Honorary Secretary unless there is a paid secretary,11 either being referred to in these rules as ‘the Secretary’; and the Honorary Treasurer. (A paid secretary shall not be a member of the Club).12 (2) Save for the President and the Vice-Presidents, the officers shall be elected annually at the annual general meeting.13 7. Trustees14 (1) All property and assets of the Club shall be vested in not less than two nor more than four trustees appointed from time to time by the Committee from membership of the Club.15 The trustees shall hold the same for and on behalf of the Ordinary Members and the Life Members of the Club. No member shall be appointed (or re-appointed) over the age of 75. Any trustee must have been a member of the Club for at least five years before the date of appointment.

4 See 5.6. 5 See 5.13. 6 It is usual to support a president by the office of vice-president: see 5.6. 7 See 5.13. 8 See 5.6. 9 See 5.2 ff. 10 The Chairman is sometimes elected by the Committee from one of its own number: see 5.13. 11 Some clubs have no Secretary but a (paid) Club Manager instead. 12 See 5.10. 13 See 6.2. 14 See 8.25 ff. 15 Or vested in a trust corporation. A professional trust corporation will involve the club in additional expenditure. See also footnote 81 in 8.26.

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Appendix K  Model Full Set of Rules for a Members’ Club (2) Trustees shall be appointed for a term of five years but at the expiry of this period shall be eligible for re-appointment. The trustee’s tenure of office will terminate on the resignation, retirement or death of the trustee. In addition, a trustee may be removed by a vote of two-thirds of the members present and entitled to vote at a special meeting.16 (3) The Committee shall have power to nominate a new trustee if a vacancy occurs by reason of one of the grounds set out in sub-rule (2) above. For the purpose of giving effect to such nomination the Committee is hereby nominated as the person to appoint a new trustee of the Club within the meaning of section 36 of the Trustee Act 1925.17 (4) The trustees shall deal with the Club’s property and assets as directed by the Committee from time to time. Without derogation from this obligation, the trustees shall have the general power of investment set out in section 3 of the Trustee Act 2000 on the basis that the statutory duty of care shall apply to the exercise of the trustees’ powers. The trustees shall have power to insure the trust property; to sell the same; to borrow money; or to give security for borrowed money by mortgage or charge on the Club’s property, provided always that the transaction in question does not involve a greater sum than £25,000. Any transaction involving a greater sum than £25,000 shall require the consent of two-thirds of the members (including proxies if applicable) present and entitled to vote at a general meeting of the Club.18 (5) The trustees shall be indemnified against risk and expense out of the Club’s funds.19 8. Membership20 Membership of the Club shall be open to all without EQA discrimination (‘EQA discrimination’ means discrimination which is unlawful under the Equality Act 2010). The membership shall consist of: (1) Ordinary Members; (2) Honorary Members; (3) Social Members; (4) Junior Members; (5) Associate Members; (6) Temporary Members. 9. Ordinary Members (1) Ordinary Members shall be adults and full members of the Club, whose numbers shall not exceed 1,500. Ordinary Members are those who join the Club as playing members. When an Ordinary Member has retired

16 See 8.28. 17 Ibid. 18 See 8.29. 19 See 8.30. 20 See 4.6 ff.

524

Model Full Set of Rules for a Members’ Club  Appendix K from playing, he may continue as a full member but shall be treated as a Social Member for the purpose of his subscription.21 (2) An Ordinary Member may pay a lump sum determined by the Committee from time to time to become a Life Member of the Club. Life Members shall have the full privileges of membership and full voting rights, but shall not be liable to pay any further subscription.22 (3) The Committee shall in its discretion award honorary life membership in recognition of the member’s long relationship with the Club or their outstanding services to the Club.23 10. Honorary Members24 An Ordinary Member of at least five years’ standing may propose to the Committee a person for honorary membership. The Committee may elect as Honorary Members those persons, not exceeding 10 in number, who in the opinion of the Committee have for good or sufficient reason merited this status. Honorary Members shall be exempt from paying any entrance fee or subscription and shall be entitled to all the privileges of membership, save that they shall have no voting rights nor may they be appointed to any office or committee of the Club. 11. Social Members25 Social Members are those who join the Club as non-playing members and whose number shall not exceed 375.26 Social Members shall be entitled to use all the social facilities of the Club. Social Members shall have the full privileges of membership and full voting rights, save that if a motion is put to the members at a general meeting which is or may be prejudicial to the interests of the playing members the Social Members shall not be entitled to vote on it. 12. Junior Members27 Membership shall be open to boys and girls over the age of eight years and under the age of 18 years. A parent or sponsor must countersign the application form of a Junior Member. No Junior Member shall be entitled to attend general meetings of the Club but may do so at the discretion of the Committee. If he or she does so attend, the Junior Member may not vote thereat nor shall his or her presence count towards any requisite quorum. A Junior Member wishing to be elected an adult member must follow the procedure laid down in Rule 15. 13. Associate Members28 (1) Members of the Basset Bowls Club may be admitted into the Club as Associate Members on the terms agreed by the Committee.

21 See 4.7. 22 See 4.10. 23  Ibid. 24 See 4.12. 25 See 2.11. 26 This is one quarter of the number of playing members: see Rule 9(1). In CASC clubs, for example, the social members must not be disproportionate to the playing members: see 1.56. 27 See 4.13. 28 See 4.14 and 4.16; also 9.34.

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Appendix K  Model Full Set of Rules for a Members’ Club (2) Members of other clubs which are recognised clubs within the meaning of section 67 of the Licensing Act 2003 may be admitted into the Club as Associate Members provided the Committee has given its prior consent to such admission. (3) Associate Members shall be entitled to all the privileges of membership, save that they shall have no voting rights nor may they be appointed to any office or committee of the Club. 14. Temporary Members29 Holiday residents staying at the South Bassetshire Camping and Caravan Park may apply to the Committee for temporary membership for the duration of their stay at the Park for a period not exceeding 14 days in any one year. The Committee shall have power to admit other Temporary Members for good or sufficient reason. Temporary Members are subject to the two-day rule set out in Rule 15(3). Temporary Members may introduce their guests into the club. Temporary Members shall be entitled to all the privileges of membership, save that they shall have no voting rights nor may they be appointed to any office or committee of the Club. 15. Election and admission of members30 (1) The election and admission of all categories of member shall be vested in the Committee. (2) A  candidate for Ordinary Membership or Social Membership must be proposed and seconded by at least two Ordinary Members of at least two years’ standing at the date of the proposal.31 (3) Any application for membership (excluding Associate Membership) must be made on an application form provided by the Secretary. A candidate may not be admitted to membership or to the privileges of membership without an interval of at least two days between their nomination or application for membership and their admission as a member of the Club.32 (4) Any potential member may be asked to demonstrate his playing ability in the sport in which he wishes to participate before his application is considered by the Committee. This demonstration may be required of an Associate Member.33 (5) A candidate for Ordinary Membership or Social Membership who receives two adverse votes (provided they are not based on EQA discrimination34) shall not be elected a member. Any objection to an application for membership should be notified to and recorded by the chairman of the meeting before the election takes place. The objection is to be treated as confidential to the members of the Committee until after the election has taken place.35 29 See 4.15. 30 See 4.2 ff. 31 See 4.3. 32 See 4.27 and 9.11. 33 See 4.17 and 4.18. 34 See 4.19. 35 Rejection of a candidate without any visible explanation may well lead to a finding by the court that unlawful discrimination has in fact occurred: see 4.26.

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Model Full Set of Rules for a Members’ Club  Appendix K (6) Upon election or admission the member will be notified accordingly and will be provided with a copy of these rules, together with a copy of the bye-laws. The member shall be bound by all rules and bye-laws which may be made from time to time.36 (7) The elected or admitted member shall not be entitled to any privileges of membership until he has paid the entrance fee (if any) and the initial subscription.37 (8) An application for Temporary Membership shall be authorised for an agreed limited period by two members of the Committee nominated by the Committee to carry out this task. 16. Membership list38 For the purposes of carrying on the activities of the Club, a list of members with suitable contact details shall be circulated annually to the membership. The list shall indicate who are officers of the club and who are members of the Committee. The contents of this list will be protected by the Data Protection Act 2018. 17. Members’ communication with the Club39 Every member shall be under a continuing duty to notify the Secretary of his up-to-date postal address, his telephone number and his e-mail address. All notices in writing required to be given by the Club to the members under these rules may be sent by post and/or by electronic means, which shall include notices posted on the club’s website. All notices sent to the member at his notified address, whichever means of communication are used, shall be deemed to have arrived two days after dispatch by the Club unless the contrary is shown. Neither the non-arrival nor the late arrival of any notice sent by the Club nor the accidental omission to give due notice of the meeting to one or more members shall invalidate any meeting convened by the Club. Any member who wishes to be contacted by the Club via the postal service and not by other means must expressly notify the Secretary of this fact in writing. The club will not use the member’s e-mail address for confidential or sensitive matters.40 18. Entrance fee41 An entrance fee (if any) for Ordinary Members and Social Members shall be such sum as the Committee shall recommend and the members approve at the annual general meeting. 19. Subscriptions42 (1) Ordinary Members and Social Members The subscription shall be such sum as the Committee shall recommend and the members approve at the annual general meeting.43

36 See 2.6. 37 See 2.8. 38 See 5.96–5.97. 39 See 5.99 and 6.14–6.15. 40 See 5.84. 41 See 4.28 ff. 42  Ibid. 43 See 4.29.

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Appendix K  Model Full Set of Rules for a Members’ Club (2) All subscriptions shall become due and payable on 1 September in each year. If a member is elected after the 1 March his first subscription shall be reduced by one-half. (3) The Committee may authorise members to pay their subscriptions by up to four instalments44 payable not later than 30 June in the following year, provided that the instalments are paid by direct debit or standing order.45 (4) In the event of a member failing to pay his subscription or any instalment by its due date, the Committee in its discretion may withdraw or restrict all or some of the privileges of membership.46 (5) If the subscription or any instalment is not paid within one calendar month of its due date, the Secretary shall send to the member a written reminder of his arrears, and if the same remains unpaid after three months of its due date the member shall automatically cease to be a member of the Club.47 (6) Associate Members The fees shall be such sums as determined by the Committee and shall be paid before entry is permitted into the club premises. (7) Temporary Members The subscription shall be such sum as determined by the Committee and shall be paid before entry is permitted into the club premises. (8) Remission In special cases the Committee shall have power to remit the whole or any part of a member’s subscription.48 20. Resignation of a member49 A member may resign from the Club by notifying the Secretary in writing of this fact. A member remains liable for his subscription for the year in which he resigned (a year for this purpose shall run from 1 September to the following 31 August).50 21. Suspension and expulsion of a member (1) The Committee shall have the power to suspend for a period not exceeding 12 months or to expel any member whose conduct, whether within the club premises or elsewhere, is in the opinion of the Committee injurious to the good name of the Club or renders him unfit for membership of the Club.51 (2) No member shall be suspended or expelled without first being summoned before the Committee and full opportunity given to him to advance an explanation or defence, nor unless two-thirds of the Committee then present shall vote for his suspension or expulsion.52 The Chairman of

44 The club may permit up to 12 instalments per year: see Financial Services and Markets Act 2000 (amended in 2013). 45 See 4.30. 46 See 4.31. 47 See 7.6. 48 See 4.33. 49 See 7.2 ff. 50 See 7.2. 51 See 7.10, 7.11 and 7.32. 52 See 7.18.

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Model Full Set of Rules for a Members’ Club  Appendix K the Committee who hears the case shall not have a casting vote on this occasion.53 (3) The Committee shall have the power to exclude the member from the club premises pending the hearing of the case against him.54 (4) A  suspended member shall cease to have any of the privileges of membership, nor may he be nominated for or hold office whilst suspended, but he shall remain liable for his subscription.55 (5) A  member who is suspended shall have the right of appeal to the Committee if he so requests in writing to the Secretary within seven days of his suspension.56 The appeal shall take place within 14  days of the request. The composition of the appellant tribunal shall, if possible, comprise different members of the Committee from those who imposed the suspension.57 If this is not possible, the appellant tribunal shall be chaired by an independent, senior Ordinary Member of at least 10 years’ standing, who shall be entitled to vote on the appeal. (6) A member who is expelled shall have the right of appeal to the members at a special meeting if he so requests in writing to the Secretary within seven days of his expulsion.58 The meeting shall be convened by the Secretary within 21 days of the expulsion. If at least two-thirds of the members present and entitled to vote at the meeting are in favour of allowing the appeal, the member shall be automatically reinstated.59 (7) If the member so requests, he may attend any hearing before the Committee or the special meeting of the members with a legal or other representative.60 22. Disciplinary proceedings61 (1) The Committee shall have the power to operate a system of disciplinary proceedings for dealing with complaints made in respect of any act or omission which in the opinion of the Committee is discreditable or prejudicial to the interests of the sporting world and/or which relates to or is connected with the member’s conduct whilst participating in one of the sports referred to in Rule 3.62 (2) The conduct of the disciplinary proceedings shall be vested in the Committee who shall have power to delegate any investigation or hearing to a Disciplinary Sub-Committee (‘DSC’).63 (3) No member shall be disciplined without first being summoned before the DSC and a proper opportunity given to him to advance an explanation or 53 See 6.44, and see 2.19 for the chairman’s abstention from voting. 54 See 7.11. 55 See 7.32 and 7.33. 56 See 7.38. 57  Ibid. 58  Ibid. 59  Ibid. 60  Ibid. 61 See 7.37 ff. 62 See 7.37. A golf club will need to include here a reference to Rule 24 of the Council of National Golf Unions Regulations 2019 in order to give the disciplinary body jurisdiction to deal with the member’s handicap. 63 See 7.37.

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Appendix K  Model Full Set of Rules for a Members’ Club defence, nor unless two-thirds of the DSC then present shall vote for the member being disciplined.64 The chairman of the DSC who hears the case shall not have a casting vote on this occasion.65 (4) If the complaint is upheld, the DSC acting on behalf of the Committee shall have power to impose one or more of the following sanctions:66 (a) to warn the member about his future conduct; (b) to censure him; (c) to fine him in a sum not exceeding £750; (d) to disqualify him for a specified period not exceeding six months from taking part in any match, game or competition; (e) to deprive him for a specified period not exceeding six months of some or all of his privileges of membership; (f) to impose on him an order for costs. The DSC must report forthwith to the Committee any decision made under this rule.67 (5) A  member who is disciplined shall have the same right of appeal as is described in Rule 21(5).68 (6) If the DSC is of the opinion that the members’ conduct merits the attention of the full Committee, it may refer the matter to the Committee to be dealt with under Rule 21, save that the Committee in this instance shall have the power to impose any of the sanctions set out in sub-rule (4) above in addition to or in lieu of its powers in Rule 21. If the Committee suspends the member, he shall have the same right of appeal as described in Rule 21(5) and, if the Committee expels the member, he shall have the same right of appeal as described in Rule 21(6).69 23. Management of the Club70 (1) Generally The management and control of all the affairs of the Club (including the supply or sale of alcohol on the Club’s premises)71 shall be vested in an elected committee (referred to in these rules as ‘the Committee’).72 (2) Bye-laws The Committee shall have power to make, alter or revoke such bye-laws as it considers necessary for the good governance and well-being

64 See 7.18 and 7.20. 65 See 6.47. 66 In dealing with a junior member the club can make suitable adjustments, eg by omitting sanctions (c) and (f). 67 See 7.38. 68 See 7.37. 69 See 7.38. 70 See 5.21. 71 The detailed arrangements concerning matters arising under the Licensing Act 2003 are best dealt with in the bye-laws. Under the Licensing Act 1964 certain matters like the supply of intoxicating liquor to non-members or the club’s permitted hours had to be dealt with in the rules themselves. This is no longer the case. 72 This may be one of the shortest rules in the rulebook but it is one of the most important.

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Model Full Set of Rules for a Members’ Club  Appendix K of the Club.73 All such bye-laws shall be published and a copy sent to all members. The Committee shall have power to fine any member up to a maximum of £250 for any breach of the bye-laws.74 (3) Clubhouse Any special provisions relating to the use of the clubhouse by members and others shall be set out in the bye-laws.75 24. The Committee76 (1) The Committee shall consist of the officers set out in Rule 6 (except the President and Vice-Presidents) plus three Ordinary Members and one Social Member. If the Secretary is a paid official, the number of Ordinary Members shall be increased to four. (2) As to tenure, the elected Ordinary Members and Social Member shall not be in office for more than five consecutive years. They may be re-elected after an interval of one year. As to election, two of the Ordinary Members/ the Social Member must retire each year, that is to say, those members who have been in office for the longest period, and (if applicable) they may stand for re-election.77 (3) Nominations must be signed by two members who are Ordinary Members of at least three years’ standing or Life Members, and must be received in writing by the Secretary at least 21 days prior to the annual general meeting.78 (4) The Secretary shall 14 days prior to the annual general meeting post the nominations for election on the Club’s notice board and on the Club’s website.79 (5) In the event of there being more nominations than vacancies the election shall be decided by secret ballot, with the outcome of the vote being decided on a ‘first-past-the-post’ basis. In the event of a tie, the election shall be decided by the drawing of lots.80 (6) The Committee shall be chaired by the Chairman of the Club.81 At its first meeting after the annual general meeting the Committee shall choose a Vice-Chairman from one of its own number who will undertake the duties of the Chairman in his or her absence.82 (7) The Committee shall meet on a regular basis, and sufficiently often to carry out its duties efficiently. Any committee member who is absent without

73 See 2.16. As an example, it is common for clubs to insist on all members producing a membership card before being allowed on to the club premises, with the associate member producing a membership card of his ‘recognised club’ (see 9.34). 74 See 7.39. 75 As an example, it is common for clubs to insist on all members producing a membership card before being allowed on to the club premises, with the associate member producing a membership card of his ‘recognised club’ (see 9.34). 76 See 5.21. 77 See 5.22. 78 See 5.22 and 5.15. 79  Ibid. 80 See 5.22 and 5.16. 81 See 5.8. 82 See 6.55.

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Appendix K  Model Full Set of Rules for a Members’ Club an accepted apology from three consecutive meetings shall be deemed to have vacated office.83 (8) The quorum for a meeting of the Committee shall be five persons.84 The chairman of the Committee, whether it be the formally chosen person or an ad hoc choice, shall have an additional casting vote at any meeting.85 All resolutions or decisions taken by the Committee shall require a simple majority of those present at the meeting, save that any amendment of the bye-laws shall require a two-thirds majority of the Committee.86 (9) The Committee shall have power to appoint an Ordinary Member or a Social Member to fill any casual vacancy that may arise on the Committee and that member shall remain in office until the next annual general meeting.87 The Committee may also co-opt up to two additional members from the Ordinary or the Social Membership for such purposes and for such time as it thinks fit but not beyond the next annual general meeting.88 Appointed and co-opted members shall have the right to vote. 25. Sub-committees89 (1) The Committee may from time to time appoint such sub-committees as it shall deem necessary or expedient to assist it in managing the affairs of the Club.90 Without derogation from the generality of this rule, there shall be a sub-committee attached to each defined sport whose remit is to look after the welfare of that sport in the Club. (2) The composition, chairmanship and quorum of any sub-committee shall be decided by the Committee and it may include Ordinary Members and Social Members who are not members of the Committee.91 All subcommittees shall conduct their business in accordance with directions from the Committee and shall periodically report their proceedings to the Committee for approval or ratification.92 (3) The Vice-Presidents shall be eligible to sit as ex-officio members of all the sub-committees, save that if they attend meetings in this capacity they shall have no voting rights.93 (4) All members of sub-committees shall automatically retire on the date on which the annual general meeting is held but shall be eligible for reappointment by the incoming Committee immediately following the annual general meeting.94 (5) If for any reason a vacancy occurs during its period of appointment, the sub-committee shall so notify the Committee, who shall have power to

83 See 6.55. 84 See 6.32. 85 See 6.47. 86 See 6.44. 87 See 5.25. 88  Ibid. 89 See 5.24, 5.25 and 6.52. 90 See 5.24. 91 See 6.56. 92 See 5.25. 93 See 5.6. 94 See 5.24.

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Model Full Set of Rules for a Members’ Club  Appendix K appoint another member to fill that vacancy for the remainder of the period.95 26. Declaration of interest96 A  member must disclose to the chairman of the Committee or any subcommittee on which he sits any interest which may conflict with the proper consideration of a matter under discussion. If the disclosing member is the chairman of the Committee or of the sub-committee, he shall disclose his interest to the next most senior person. A member disclosing an interest shall not be entitled to vote on the matter under discussion and the other members at the meeting shall decide whether the disclosing member may participate in the discussion. 27. Indemnity97 The members of the Committee, the officers of the Club, and the officials of the Club shall be indemnified by the Club out of club funds against any legal or monetary claim made against them by third parties in connection with the proper discharge of their duties. 28. Annual General Meeting98 (1) There shall be an annual general meeting (‘AGM’) of the Club held on a date fixed by the Committee not later than 30 June in each year, provided that not more than 15 months shall elapse between each meeting. (2) The purposes for which the meeting is convened shall be: (a) to receive a report from the Secretary in respect of the Club’s activities since the previous annual general meeting; (b) to receive from the Honorary Treasurer and, if thought fit, to approve the Club’s audited accounts in respect of the preceding financial year; (c) to elect the President (if the office be vacant), the Vice-Presidents (if there be any vacancy), the officers of the Club and the members of the Committee; (d) to appoint an auditor for the ensuing year; (e) to discuss or decide any other matter of general business of the Club duly submitted to the meeting. (3) All adult members of the Club shall receive not less than 21 days’ notice in writing of the date, the time and the place of the meeting, together with the agenda of the meeting concerning the general business of the Club.99 No member, save with the consent of the chairman of the meeting, shall bring any matter before the meeting unless he has given notice of motion in writing to the Secretary not less than 14 days before the meeting100 (although points for discussion under the AOB item may be received in

95 See 5.25. 96 See 5.26. 97 See 13.19(4). 98 See 6.2 ff. 99 See 6.10 and 6.25. 100 See 6.25.

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Appendix K  Model Full Set of Rules for a Members’ Club writing up to 48 hours before the meeting).101 A notice of agenda shall be posted in the clubhouse for at least 14 days prior to the meeting.102 (4) If the clubhouse is closed for business in accordance with any legal requirements or guidance issued by the Government or any other public authority, and it is impossible in the reasonable opinion of the Committee to hold the AGM thereat or at some other specified location within the 15-month period prescribed by Rule 28(1), the Committee shall call the meeting as soon as practicable thereafter provided that in doing so it does not contravene the said legal requirements or guidance. 29. Special meetings103 (1) A  special general meeting (‘special meeting’) of adult members of the Club shall be convened by the Secretary within 28 days of receipt by him of a direction of the Committee or of a requisition signed by not less than 30 members entitled to attend and vote at a general meeting or by onefifth of such members (whichever is the smaller number).104 All members will receive not less than 14  days’ notice in writing of the meeting.105 The notice shall specify the purpose of the special meeting and no other business may be brought before this meeting.106 (2) If the Secretary fails to convene a duly requisitioned special meeting within the 28 day period, the requisitionists themselves may convene such meeting to be held not later than 56 days after the deposit of the requisition with the Secretary. The reasonable costs of the requisitionists in convening this meeting shall be borne by the Club.107 30. Procedure at meetings (1) A general meeting may proceed to business if 30 Ordinary Members and/ or Life Members are present within half an hour after the time fixed for the meeting. If no quorum is then present and the meeting was convened by requisition of the members, it shall be dissolved; and if convened by direction of the Committee it shall stand adjourned to the week following on the same day and at the same time and place. If at the adjourned meeting there is still no quorum the meeting shall be dissolved.108 (2) If a general meeting is adjourned for want of time, the members present at the meeting will be notified there and then of the adjourned date, if this is practicable. If not, and the matter is adjourned for more than 14 days, all the members shall receive notice in writing of the adjourned hearing; otherwise only those who attended the original meeting will be notified of the adjourned date.109 (3) No member who is in arrear with the payment of his subscription shall be entitled to exercise his vote at a general meeting.110 101 See 6.5. 102 See 6.10. 103 See 6.6 ff. 104 See 6.7. 105  Ibid. 106 See 6.6. 107 See 6.8. 108 See 6.35. 109 See 6.28. 110 See 4.31.

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Model Full Set of Rules for a Members’ Club  Appendix K (4) Unless otherwise stipulated in these rules, any motion to be carried shall require the votes of a simple majority of the members present and voting at the meeting. (5) Where a motion relates to an item of special business, the following shall apply:111 (a) the vote shall be decided on a show of hands unless a poll is demanded under (b) or (c) below; (b) a poll may be demanded in advance of the meeting; (c) a poll may be demanded at the meeting either before the show of hands or immediately after the result of a show of hands; (d) a poll may be demanded by the chairman of the meeting or by at least 10 Ordinary Members and/or Life Members; (e) the poll must take place at the meeting; (f) the poll shall include voting by proxy. The proxy forms shall be sent out with the notice of the meeting, and are to be returned to the Secretary by post or by e-mail to arrive not later than three days before the meeting; (g) all business shall be deemed special save those items appearing regularly on the AGM agenda. (6) The chairman of any meeting shall be entitled to a casting vote in addition to his ordinary vote.112 31. Electronic meetings113 (1) This rule supplements Rules 28, 29 and 30, save that (i) Rule 30(5)(a)–(e) shall not apply to an electronic meeting and (ii) in Rule 30(5)(f) the word ‘vote’ shall replace the word ‘poll’. (2) The Committee shall have power in appropriate cases to hold and conduct a meeting in such a way that members who are not present together at the same place may by electronic means attend and speak and vote at it. (3) The use of electronic means for the purpose of enabling members to participate in a general meeting may be made subject only to such requirements and restrictions as are: (a) necessary to ensure the identification of those taking part and the security of the electronic communication, and (b) proportionate to the achievement of those objectives. (4) Any proposed written resolution by the Committee or a member must be circulated to every member who is entitled to vote at the meeting at least 21 days before the meeting. (5) This resolution may be circulated by post, by email or by publishing it on the Club’s website.

111 See 6.38 (show of hands), 6.39 (poll), 6.42 (proxies). 112 See 6.47. 113 See 6.20 and 6.59.

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Appendix K  Model Full Set of Rules for a Members’ Club 32. Auditor114 There shall be an independent auditor appointed on an annual basis. 33. Financial powers (1) The Committee shall have power to open a bank account with a High Street bank in the name of the Club and to arrange such facilities as may be necessary to carry on the activities of the Club including the arrangement of a loan or overdraft, whether on a secured or unsecured basis, provided that such loan or overdraft shall not exceed the sum of £10,000 without the prior approval of the members obtained at a general meeting.115 (2) The Committee reserves the right to impose a levy on the Ordinary Members and/or the Life Members and/or the Social Members for an item of expenditure which is justified by the circumstances at the time of imposition.116 (3) The Committee via the Trustees may in its discretion establish and maintain a sinking fund or a reserve fund for such purposes as it shall think fit.117 (4) The Committee via the Trustees shall have power to invest the Club’s funds in any prudent manner which in the reasonable opinion of the Committee will benefit the Club.118 (5) The Committee shall have power to spend the Club’s funds in furtherance of the objects set out in Rule 2, as well as in compliance with its duties of management under Rule 23(1).119 (6) The Club shall have power to defray out of the Club’s funds those expenses which are wholly and necessarily incurred by members of the Committee or any sub-committee or incurred by any member acting with the consent of or on the authority of the Committee. For the avoidance of doubt, the Committee may arrange appropriate insurance cover in respect of the duties and responsibilities undertaken by these persons.120 (7) All cheques drawn by the Club shall be signed by the Chairman of the Club and the Honorary Treasurer or by such other officers as may be authorised by the Committee, provided that all cheques are signed by two officers.121 34. Guests and visitors122 (1) The Committee shall have power by way of bye-laws to regulate the admission of guests and visitors into any part of the Club’s premises. (2) Members may personally introduce guests into the Club’s premises, but must accompany such guests during their stay at the Club and shall be responsible for the good behaviour of such guests. The Committee shall 114 See 5.18. 115 See 5.44. 116 See 4.11 and 5.47. 117 See 5.48. 118 See Rule 7(4) above. 119 See 5.21. 120 See 5.67, 13.19, 13.37 and 13.38. This rule will cover those members of a club who, for example, undertake refereeing or umpiring duties in such sports as boxing, football, hockey and rugby. 121 See 5.45. 122 See 4.36–4.39.

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Model Full Set of Rules for a Members’ Club  Appendix K have power in its absolute discretion to exclude any guest or visitor from the Club’s premises. 35. Interpretation of the rules123 The reference in these rules to the masculine gender shall in all cases apply equally to the feminine gender. If any question or dispute arises as to the meaning or interpretation of these rules or of the bye-laws made thereunder, the matter must be referred to the Committee for a ruling thereon. 36. Amendment of the rules124 (1) These rules may be amended by the members by way of alteration, addition or revocation at a special meeting or at the annual general meeting. Any amendment to be proposed at the annual general meeting must be sent out as part of the agenda referred to in Rule 28(3).125 (2) To be carried, any motion to amend the rules shall require the votes of two-thirds of the members (including proxies if applicable) present at the meeting and entitled to vote. (3) In the discussion of a motion to amend the rules, any proposed amendment to the motion may be carried by a simple majority of the members (including proxies if applicable) present and voting at the meeting. 37. Dispute resolution126 Any dispute between the Club and its members or between the members themselves which relates to these rules (or the bye-laws) or which concerns the affairs of the Club shall be referred to the arbitration of a sole arbitrator to be appointed in accordance with section 16(3) of the Arbitration Act 1996, the seat of such arbitration being hereby designated as London, England. In the event of failure of the parties to make the appointment pursuant to section 16(3), the appointment shall be made by the President of the Chartered Institute of Arbitrators.127 The arbitrator shall decide the dispute according to the laws of England and Wales. This rule does not prevent the dispute being referred to mediation for resolution prior to arbitration. 38. Dissolution of the Club128 (1) Any motion to dissolve the Club must be the subject matter of a special meeting.129 (2) To be carried, any motion to dissolve the Club shall require the votes of two-thirds of the members (including proxies if applicable) present at the meeting and entitled to vote thereat.130 (3) In the event that the members pass a resolution to dissolve the Club, any property or assets belonging to the Club shall not be distributed to the members if there is a surplus of assets over liabilities, but will be given or

123 See 2.17–2.21. 124 See 2.22–2.43. 125 See Appendix M for an example of amendment of the rules at an AGM. 126 See 5.101 ff. 127 This procedure is authorised by s 18(1) of the Arbitration Act 1996. 128 See 3.15 ff. 129 See 3.16. 130  Ibid.

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Appendix K  Model Full Set of Rules for a Members’ Club transferred to The Bassetshire Association for the Encouragement of Sport or to such other club or entity having similar objects to the Club, or to a charitable organisation, as the members may decide upon.131 Date of Rules: 25 June 2014 Amended: 24 June 2020

131 See 8.11 as to the desirability of this sub-rule.

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Appendix L

Model Short-form Set of Rules for a Members’ Club

Rules of the Bassetshire Hockey Umpires Association1 Index Rule 1: Name Rule 2: Affiliation Rule 3: Object Rule 4: Membership Rule 5: Election of members Rule 6: Communication with the Association Rule 7: Subscriptions Rule 8: Resignation of a member Rule 9: Suspension and expulsion of a member Rule 10: Officers of the Association Rule 11: Management of the Association Rule 12: Powers of the Committee Rule 13: Annual General Meeting Rule 14: Special meetings Rule 15: Quorum and voting at meetings Rule 16: Electronic meetings Rule 17: Interpretation of the rules Rule 18: Amendment of the rules Rule 19: Dissolution of the Association 1

Based on the actual rules of an umpiring association. The association will have no clubhouse or premises, so the rules do not have to cater for such topics as trusteeship of property or alcohol licensing, nor is there any call for sub-committees or bye-laws. The form and contents of the rules can be expressed in a straightforward manner, yet tailored to suit the needs of the association. These rules take account of all the basic rules set out in 2.9.

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Appendix L  Model Short-form Set of Rules for a Members’ Club Note As stated in 2.1, ‘The club’s set of rules is the bedrock of club law’. The footnotes in this Appendix refer to the main text of the book in order to assist the understanding of and the need for the rules in question.

Rules 1. Name2 The Association shall be called the Bassetshire Hockey Umpires Association (‘the Association’). 2. Affiliation3 The Association shall be affiliated to the Bassetshire Hockey Association and the Mid-Counties Hockey Umpires Association. 3. Object4 The object of the Association is to provide and promote quality hockey umpiring through networking, development, training, grading, support, and opportunity for all the members and the teams which it serves. 4. Membership5 Membership shall be open to men and women over the age of 18 years, on a non-discriminatory basis, who are interested in the object of the Association, and the Association shall consist of Ordinary Members, Appointed Members, and Life Members. 5. Election of members6 (1) The election of each category of member shall be vested in the Committee. A  person who wishes to be elected as an Ordinary Member shall fill in an application form provided by the Honorary Secretary. A  person who wishes to be elected as an Appointed Member, if he is not already an Ordinary Member, shall fill in an application form provided by the Honorary Secretary. If he is already an Ordinary Member, he should informally approach the Honorary Secretary to make known his wish, who will pass on this information to the Committee. (2) The Committee may accept as a probationer any person requesting election as an Appointed Member. The Committee shall not elect any person as an Appointed Member unless it is satisfied that the candidate has the knowledge and ability to apply the rules of hockey7 and is suitable to be elected an Appointed Member of the Association. Active members of other hockey umpiring associations may be elected Appointed Members of the Association. (3) Appointed Members will be placed on either the Active List or the NonActive List. (4) The Committee may elect as Life Members those members who in its opinion have for good and sufficient reason merited this status. Life Members shall be exempt from paying subscriptions and shall enjoy all the privileges of membership.8

2 See 2.12. 3 See 4.16. 4 See 2.14. 5 See 4.6 ff. 6 See 4.2 ff. 7 See 4.18. 8 See 4.10.

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Model Short-form Set of Rules for a Members’ Club  Appendix L 6. Communications with the Association9 Every member shall be under a continuing duty to notify the Hon. Secretary of his up-to-date postal address, his telephone number and his e-mail address. All notices in writing required to be given by the Association to the members under these rules may be sent by post and/or by electronic means, which shall include notices posted on the Association’s website. All notices sent to the member at his notified address, whichever means of communication are used, shall be deemed to have arrived two days after despatch by the Association unless the contrary is shown. Neither the non-arrival or late arrival of any notice sent by the Association nor the accidental omission to give due notice of the meeting to one or more members shall invalidate any meeting convened by the Association. 7. Subscriptions10 A  member’s annual subscription shall be such sum as the members may determine at the AGM. All subscriptions shall become due on the 1 October in each year. Any member not paying his subscription by the due date may, at the Committee’s discretion, be disqualified from umpiring any match where the appointment is made by the Association.11 If the subscription remains unpaid after two months of its due date, the Honorary Secretary shall send to the member a written reminder of his arrears, and if the same remains unpaid after three months of its due date the member shall automatically cease to be a member of the Association. 8. Resignation of members12 A member may resign from the Association by notifying the Secretary in writing of this fact. A member remains liable for his subscription for the year in which he resigned (a year for this purpose shall run from 1 October to the following 30 September). 9. Suspension and expulsion of members13 (1) Complaints received by the Association concerning an umpiring member should be recorded in writing by the Honorary Secretary and then referred to the Committee for its consideration. (2) The Committee shall have the power to stand down any member from umpiring pending the hearing of the case against him (including umpiring at non-appointed matches). (3) The Committee shall have the power to suspend for a period not exceeding 12 months or to expel a member who infringes any of these rules or whose conduct, whether on or off the field, is in the opinion of the Committee injurious to the good name of the Association or renders him unfit for membership. No person shall be suspended or expelled without first being summoned before the Committee and full opportunity afforded to him to advance a defence to the allegations being made against him nor unless two-thirds of the Committee then present shall vote for his suspension or expulsion. (4) No suspended member may be elected as an officer of the Association but he shall remain liable for his subscription.

9 See 5.99 and 6.14–6.15. 10 See 4.28 ff. 11 See 4.31. 12 See 7.2 ff. 13 See generally 7.10 (expulsion) and 7.32 (suspension).

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Appendix L  Model Short-form Set of Rules for a Members’ Club 10. Officers of the Association14 The Association shall have the following officers, all of whom shall be elected at the annual general meeting: a Chair, a Vice-Chair, an Honorary Secretary, an Honorary Treasurer, two Appointment Secretaries (men/women), a Development Officer, two Regional Representatives (men/women) and a Publicity Officer. Upon election all officers shall hold office until the next AGM when their term of office shall expire but they may offer themselves for re-election. 11. Management of the Association15 The management and control of all the affairs of the Association shall be vested in a committee of members (‘the Committee’). The Committee shall consist of the Chair, the Vice-Chair, the Honorary Secretary, the Honorary Treasurer, and two officers who shall be chosen by the officers from their own number. The Committee shall meet as and when appropriate. Any committee member who is absent without an accepted apology from three consecutive committee meetings shall be deemed to have vacated office. A  quorum for meetings of the Committee shall be three members.16 The chair of any committee meeting shall have an additional casting vote.17 All resolutions or decisions taken by the Committee shall require a simple majority of those present at the meeting.18 12. Powers of the Committee19 For the avoidance of doubt the Committee’s management shall include the following specific powers: (1) to fill any vacancy amongst the officers until the next AGM; (2) to open a bank account with a High Street bank in the name of the Association and to arrange such facilities as may be necessary to carry on the activities of the Association, including the arrangement of a loan or overdraft provided that such loan or overdraft shall not exceed the sum of £2,000 without the prior approval of the members obtained at a general meeting;20 (3) to retain and hold as property of the Association all sums of money coming into the Association and to bank the funds of the Association. All cheques drawn by the Association shall be signed by the Chair and the Honorary Treasurer, or by such other officers of the Association as may be duly authorised by the Committee, provided that all cheques are signed by two officers;21 (4) to invest sums of money in any prudent manner which the Committee thinks will benefit the Association;22 (5) to permit, unless a contrary direction is given, all officers to pay out-ofpocket expenses or fees authorised by the Committee; (6) to arrange insurance cover for members in respect of all their umpiring activities, whether or not they are acting as appointed umpires;23 14 See 5.2 ff. 15 See 5.21. 16 See 6.32. 17 See 6.47. 18 See 6.44 and 6.55. 19 See 5.21. 20 See 5.44. 21 See 5.45. 22 See 5.21. 23 See 13.38.

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Model Short-form Set of Rules for a Members’ Club  Appendix L (7) to assess on an on-going basis the performance of the Appointed Members and to re-grade them, higher or lower, as and when necessary; (8) to appoint, at the request of any club or school affiliated to the Bassetshire Hockey Association, one or two Appointed Members as the umpires for any match, provided that the club or school shall pay (if so requested by the Association) the notified appointment fees and expenses, and provided that they agree to be bound by the rules of the Association as may be made from time to time. 13. Annual General Meeting24 (1) The annual general meeting (‘AGM’) of the Association shall be held in June of each year for the purpose of receiving the reports of the Committee and any sub-committee in respect of the Association’s activities since the previous AGM (including the election of any Honorary Member); receiving from the Honorary Treasurer and, if thought fit, approving the accounts in respect of the preceding financial year; electing the officers of the Association (including the appointment of any Honorary Auditor); fixing the subscriptions; and for the transaction of the general business of the Association. (2) All categories of members shall receive not less than 21 days’ notice in writing of the date, the time and the place of such meeting, together with an agenda.25 (3) No member, save with the permission of the chair of the meeting, may bring any matter before the meeting unless, before 15 May in that year, he has given notice in writing to the Honorary Secretary of the substance of the matter which he wishes to raise at the meeting.26 (4) If in accordance with any legal requirements or guidance issued by the Government or any other public authority, it is impossible in the reasonable opinion of the Committee to hold an AGM within the prescribed month of June in that year, the Committee shall call the meeting as soon as practicable thereafter provided that in doing so it does not contravene the said legal requirements or guidance. 14. Special meetings27 A special meeting of the members shall be convened by the Honorary Secretary within 28 days of receipt by him of a direction by the Committee or of a requisition signed by not fewer than one-fifth of the total membership. All categories of members shall receive not less than 14 days’ notice in writing of such meeting. The notice will specify the purpose of the meeting and no other matter may be brought before such meeting. 15. Quorum and voting at meetings (1) A general meeting (that is, an AGM or a special meeting) may proceed to business if 25 members are present within half an hour after the time fixed for the meeting. If inquorate and convened on the requisition of the members, it shall be dissolved. If inquorate and convened by direction of the Committee, it shall stand adjourned to the same time and place in 24 See 6.2 ff. 25 See 6.10 and 6.25. 26 See 6.25. 27 See 6.6 ff.

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Appendix L  Model Short-form Set of Rules for a Members’ Club the following week, and the adjourned meeting may proceed to business whatever the number of members then present.28 (2) Only fully paid up members shall be allowed to vote at a general meeting.29 The chair of the meeting shall have an additional casting vote.30 Any motion to be carried shall require a simple majority of those entitled to vote and present at the meeting, save for any amendment of the rules or the dissolution of the Association which shall require a two-thirds majority of those entitled to vote and present at the meeting.31 If the chairman of the meeting considers that any particular motion may be prejudicial to the interests of the Appointed Members on the Active List, he may rule that no other category of member shall be entitled to vote thereon.32 16. Electronic meetings33 (1) This rule supplements Rules 13, 14 and 15. (2) The Committee shall have the power in appropriate cases to hold and conduct a general meeting in such a way that members who are not present together at the same place may by electronic means attend and speak and vote at it. (3) Any proposed written resolution by the Committee or a member must be circulated to every member who is entitled to vote at the electronic meeting at least 21 days before this meeting. The resolution may be circulated by post, by email or by publishing it on the Association’s website. 17. Interpretation34 The reference in these rules to the masculine gender shall in all cases apply equally to the feminine gender. If any question or dispute arises as to the meaning or interpretation of these rules, the matter must be referred to the Committee for a ruling thereon. 18. Amendment of the rules35 These rules may be added to, altered or revoked by members at a special meeting or, if the amendment is proposed by the Committee, at an AGM. Any amendment to be proposed at the AGM must be contained in the notice of the AGM sent under Rule 13.36 19. Dissolution of the Association37 In the event that the members pass a resolution to dissolve the Association, any property belonging to the Association shall not be distributed to the members if there is a surplus of assets over liabilities, but will be given or transferred to the Bassetshire Hockey Association or to such other body having similar objects to the Association as the members may decide upon. Date of Rules: 25 June 2014. Amended: 24 June 2020.

28 See 6.32. 29 See 4.31. 30 See 6.47. 31 See 6.44 and 6.46. 32 See 2.11. 33 See 6.20 and 6.59. 34 See 2.20–2.21. 35 See 2.22 ff. 36 See Appendix M for an example of a proposed amendment of the rules at an AGM. 37 See Chapter 3.

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Appendix M

Specimen Notice and Agenda for an Annual General Meeting (with Proxy Form)

Bassetshire Historical Society Notice is hereby given that the seventy-fifth Annual General Meeting of the Society will be held at the Constitutional Club, Basset, BA1 3XA on Wednesday 27  May 2020 at 7.30pm. (Signed) Daniel Whiddon Honorary Secretary 27 April 2020

AGENDA 1. To receive apologies for absence. 2. To approve the minutes of the previous Annual General Meeting. 3. Matters arising. 4. To receive from the Honorary Secretary a report on the Society’s activities since the previous Annual General Meeting. 5. To receive from the Honorary Treasurer and, if thought fit, to approve the Society’s audited accounts for the preceding financial year ended 31 December 2019. 6. To elect for the forthcoming year the President, the Vice-President and the other officers of the Society and the members of the Committee. 7. To re-appoint the Honorary Auditor. 8. To fix the subscriptions of the various categories of member. 9. To present to Professor Tom Cobley FBA an inscribed and illustrated Special Edition of the History of Basset in Roman Times in recognition of his exemplary work on behalf of the Society. 10. Any other business. 545

Appendix M  Specimen Notice and Agenda for an AGM (with Proxy Form) Note: A member who wishes to bring any other matter of general business before the Annual General Meeting must give notice in writing to the Hon Secretary of such matter by 13 May 2020 pursuant to Rule 15.

Special Business 11. To consider the recommendation of the Committee that a junior section of the Society be established in accordance with the motion referred to below.

Motion (1) That this meeting resolves that membership of the Society be open to children between the ages of 10 and 18 years. (2) That pursuant to the said resolution this meeting resolves that a new Rule 6A be added to the Rules of the Society as follows: ‘6A Junior Membership Membership shall be open to boys and girls over the age of 10 years and under the age of 18 years. A parent or sponsor must countersign the application form of a junior member. No junior member shall be entitled to attend general meetings of the Society but may do so at the discretion of the Committee. If he or she does so attend, the junior member may not vote thereat nor shall his or her presence count towards any requisite quorum. A  junior member wishing to be elected an adult member must follow the procedure laid down in Rule 8.’ Note: as item (2) of the motion will entail amendment of the rules of the Society, a two-thirds majority of those present and entitled to vote will be required in accordance with Rule 20, if this item is to be passed at the Annual General Meeting. Please see attached Proxy Voting Form on next page

546

Specimen Notice and Agenda for an AGM (with Proxy Form)  Appendix M

Bassetshire Historical Society Proxy Voting Form Special Business at the Annual General Meeting on Thursday 27 May 2020 Please complete in BLOCK CAPITALS I, (name)………………………….. of (address)………………………………………………… being a member of the Bassetshire Historical Society, hereby appoint …………………………………….. (the proxy), or in default the chairman of the meeting, to be my proxy to vote for me on my behalf at the Annual General Meeting of the Society to be held on 27 May 2020 and at any adjournment thereof. This form is to be used as follows: Resolution (1):  FOR*  AGAINST* Resolution (2):  FOR*  AGAINST* Unless otherwise instructed, the proxy may vote as he thinks fit or he may abstain from voting.1 * Strike out whichever is not desired. Signed……………………………….. Dated………………… This form should be returned by e-mail to Mr Daniel Whiddon, the Hon. Secretary (daniel.whiddon@ coolmail.co.uk) or posted to Mr Daniel Whiddon, The Gables, Sandy Lane, Basset BA4 9RP to arrive not later than 5pm on Monday 25 May 2020.

1

This rider is commonly added to proxy forms since it gives the proxy leeway to vote in accordance with what he honestly believes would be the member’s wishes where his instructions do not cover a particular situation, for example, an amendment to Resolution (1) is proposed at the meeting to put the age of admission of the Junior Member at 12 years instead of 10 years which was specified in the original motion. If in doubt as to those wishes and mindful of the best interests of the member he is representing, the proxy may decide to abstain from voting on the amendment.

547

Appendix N

Specimen Minutes of a Committee Meeting1

Basset Borough Council Standards Committee MONDAY 20 APRIL 2020 MEETING HELD AT THE BASSET TOWN HALL Present: Cllr W Brewer (Vice-Chairman), Cllr J Stewer, Cllr P Gurney, Mr P Davey (independent member) and Mr D Whiddon (parish council representative). In attendance: Cllr H Hawke (Council Leader) pursuant to Council Procedure Rule 9.34, and Mr T Cobley (Chief Solicitor in his capacity of Monitoring Officer). Apologies for absence: Mr T  Pearce (Independent Chairman) and Cllr Mrs F Widecombe.

Part 1 – Public 20/08

20/09 20/10

1

Appointment of Chairman of the Meeting The Vice-Chairman, Councillor Brewer, informed the meeting that the Chairman, Mr Pearce, was unable to attend due to ill-health. He reminded the Committee that under Article  19 of the Constitution of the Basset Borough Council meetings of the Standards Committee must be chaired by an independent member and proposed that Mr Davey be appointed to chair this meeting. Councillor Gurney seconded the proposal and it was: Resolved: that Mr Peter Davey chair the meeting of the Standards Committee. Declarations of Interest There were no declarations of interest made. Minutes of the previous meeting Resolved: that the minutes of the meeting of the Standards Committee held on 20 January 2020 be approved as a correct record and signed by the Chairman.

Based on some actual minutes and commended as they are concise yet informative. Club committee meetings would be held wholly in private.

549

Appendix N  Specimen Minutes of a Committee Meeting 20/11

20/12

20/13

20/14

New Protocol: Functions of the Monitoring Officer The Chief Solicitor presented a new protocol for the principal functions of the Monitoring Officer and the manner in which the Council could expect those functions to be discharged. The Committee was advised that the protocol had been drawn up by Mr John Devon, an expert on local government law, and customised to meet the needs of the Borough Council, and it was: Resolved: that the protocol be approved and adopted. Initial Assessment of Complaints The report of the Chief Solicitor set out details of the criteria to be applied by the Assessment SubCommittee when conducting an initial assessment of allegations of failure by Members to observe the Code of Conduct. Concern was expressed about the process in respect of anonymous complaints and about the format of evidence to be submitted in support of complaints. Members requested that a future report should give guidance in respect of the three categories of complaint (namely, complainant’s identity fully disclosed; fully anonymous; and semi-anonymous, that is to say, complainant’s identity disclosed to the Monitoring Officer but withheld from the subject of the complaint). Resolved: that the report be received and noted and, following amendment and clarification by the Chief Solicitor, be re-submitted to the next meeting of the Standards Committee. Complaints Process The report of the Chief Solicitor set out details of the complaint form and guidance notes to be provided to complainants. In view of the previous resolution it was: Resolved: that the report be withdrawn and, following clarification by the Chief Solicitor, an amended report be submitted to the next meeting of the Standards Committee. Annual Report to the Standards Board The report of the Chief Solicitor set out details of monitoring activity during 2019 and highlighted the arrangements for submitting information to the Standards Board for England in the Borough Council’s Annual Return following the change of procedure dealing with complaints. Resolved: that the report be received and noted.

Part 2 – Private 20/15

Exclusion of Press and Public The Chairman said that public discussion of the next item would involve disclosure of exempt information and must be discussed in private.

20/16

Appeal by the Basset North End Parish Councillors to the Appeals Tribunal for England The Tribunal’s decision in the above matter dated 20 March 2020 from the Standards Committee’s decision made on 17 December 2019 was put before the meeting. It was noted that the Tribunal had allowed the appeal in part by setting aside one of the sanctions imposed on the two councillors by the Standards Committee, namely, the letter of apology. The members discussed the wisdom of this decision in the light of the facts of the case. Resolved: that the appeal decision be noted. THE MEETING ENDED AT 20:38 HOURS. 550

Index

[All references are to paragraph number.]

A Accounts see under Taxation Admission into club application form, example, 4.1 criteria to be fulfilled, 4.3 Equality Act 2010, effect, 4.2 formal process, 4.1 harassment, 4.24 invitation only, by, 4.2 rejection, reasons see under Membership selection process— black-balling, 4.4 congeniality, need for, 4.2 election of members, 4.3 Licensing Act 2003, under, 4.3 procedure, 4.3 proprietary club, in, 4.5 rejection, reasons see under Membership simple form, 4.2 victimisation, 4.25 simple process, 4.1 unlawful refusal, 4.2 Agency see Third party liability Alcohol licensing criminal offence see Criminal offence (alcohol licensing) supply and sale see Supply and sale of alcohol Alternative dispute resolution, see Civil proceedings Amalgamation charitable club, 3.11 community amateur sports club, 3.12 community club, 3.8 community interest company, 3.10 company club, 3.9 generally, 3.3 literary and scientific institution, 3.13 merger, 3.3 proprietary club, 3.14 unincorporated members’ club, 3.4–3.6 ‘Amalgamation principles’ document, 3.4 conversion procedure, 3.6

Amalgamation – contd unincorporated members’ club – contd dissolution meetings, 3.4 new rules, at joint meeting, 3.5 working men’s club, 3.7 Annual general meeting business at— any other, 6.5 generally, 6.2 extension for holding, during coronavirus pandemic, 6.3 generally, 6.2 importance, 6.2 notice, common period, 6.11 special business, 6.4 time between, 6.2 Assets see Property Associate meaning, 4.14 Association meaning, 1.2 ’Association’ charitable incorporated association, 1.62 types, 1.1 unincorporated see Unincorporated association Auditor appointment and role, 5.18 B Betting meaning, 12.63 gaming, overlap with, 12.66 illegal on club premises, 12.65 lottery as, 12.67 offences, 12.64 pool, 12.66 race night, 12.66 roulette, 12.66 Borrowing powers charitable incorporated organisation, 5.53 community club, 5.50 community interest company, 5.52 company club, 5.51 literary and scientific institution, 5.54

551

Index Borrowing powers – contd proprietary club, 5.55 unincorporated members’ club, 5.49 working men’s club, 5.50 Business rates appeal against assessment, 17.49 basic principle, 17.43 calculation, 17.50 check, challenge, appeal, 17.49 enforcement, 17.54 failure to pay, liability order, 17.54 generally, 17.42 occupation— case law, 17.45 degree of, as question of fact, 17.45 licence or tenancy, premises held on, 17.46 requirements, 17.44 occupier’s liability, 17.47 rateable value, 17.48, 17.49 rating list, 17.49 relief— discretionary, 17.53, 17.54 eligible organisations for, 17.54 generally, 17.51 legislation governing, 17.51 mandatory, 17.52 Business tenancy break clause notice, 15.17 generally, 15.13 legislation governing— attempt to contract out, 15.24 generally, 15.13 licence construed as, 15.13 new tenancy– application for, 15.15, 15.21, 15.22 court’s power to refuse or grant, 15.19 grounds of opposition, 15.19 section 26 notice, 15.22 terms, 15.20, 15.21 notice to quit, 15.16–15.18 occupation of premises, 15.14 section 25 notice, 15.16–15.18 section 26 notice, 15.22 section 27 notice, 15.23 security of tenure— contracting out, 15.24 generally, 15.15 loss, 15.15 surrender, 15.24 termination, 15.15, 15.16–15.18, 15.21, 15.23 types, 15.14 Bye-laws amendment, 2.22 breach, sanction, 7.38 power to make, 2.16 provision of copy to members, 2.16

C Cash basis accurate forecasts, need for, 5.44 cheques, drawing, 5.45 credit agreements, 5.46 credit card, use, 5.46 deficit budgeting, 5.44 generally, 5.44 judicial authority and analysis, 5.44 levy, 5.47 need for club to operate on, 5.44 Reserve Fund, 5.48 sinking fund, 5.48 vigilance, need for, 5.44 Charitable club amalgamation, 3.11 application for registration, 1.46 charitable incorporated organisation, as see Charitable incorporated organisation charitable purposes, 1.43, 1.44 civil proceedings by— generally, 19.17, 19.37 see also Civil proceedings criteria for formation, 1.43 existing charities, continued existence, 1.44 generally, 1.43 legal structure, summary, 1.71 Table 1 legislation governing, 1.43 registration, 1.46 taxation, 17.18 trustees, control by, 5.42 Charitable incorporated organisation constitution and objects, 2.39 borrowing powers, 5.53 contract, liability in, 13.23 dissolution— generally, 3.27 members’ liability on, 3.39 generally, 1.45 insolvency— disqualification of trustees, .57 generally, 3.56 legislation governing, 3.56 internal disputes, settling, 5.107 property, ownership, 8.22 Child discrimination, 5.77 gaming and lotteries, 12.4 protection— Child Welfare Officer, 5.69 duty, 5.69, 5.70 guidance, 5.69 independent contractor’s liability, 5.70 legislation, 5.69 non-delegable duty of care, 5.70 young person, 12.4

552

Index Civil proceedings alternative dispute resolution— adjudication, 19.48 arbitration, 19.44, 19.45, 19.47 early neutral evaluation, 19.50 expert determination, 19.49 generally, 19.4, 19.43 legislation governing, 19.44 mediation, 19.46, 19.47 pre-action protocols, 19.4, 19.43 waiver of legal rights, 19.43 claim— charitable club, 19.17 civil courts, in, 19.3 community amateur sports club, 19.18 community club, 19.14 community interest company, 19.16 company club, 19.15 defence see defending claim below literary and scientific institution, 19.12 online services, use, 19.6 pre-action conduct and protocol, 19.4 proprietary club, 19.19 pursuit, 19.3–19.6 service of documents, 19.5 simple, 19.6 statement of value, 19.21 types, 19.3 unincorporated members’ club, by see unincorporated members’ club, claim by below working mem’s club, 19.13 club’s involvement in— Civil Procedure Rules, 19.1 claim see claim above generally, 19.1, 19.2 legal advice, need for, 19.1 overriding objective furthering, 19.1 special meeting prior to, 19.2 costs order, enforcement, 19.30 defending claim— acknowledgment of service, 19.20, 19.23, 19.24 charitable club, 19.37 community amateur sports club, 19.38 company club, 19.35 community club, 19.34 community interest company, 19.36 costs order, enforcement, 19.30 counterclaim, 19.21 generally, 19.20, 19.21 irregularity in claim form, 19.23, 19.24 judgment, enforcement, 19.28, 19.29 limitation period, expiry, 19.21 literary and scientific institution, 19.32 matters disputed, need to list, 19.21

Civil proceedings – contd defending claim – contd minor defect in, 19.24 person wrongly sued, where, 19.25– 19.27 proprietary club, 19.39 representative defence, 19.25–19.27 response pack, 19.20 set-off, 19.21 time for filing defence, 19.20 trustees as defendants, 19.31 working men’s club, 19.33 representative action— enforcement of judgment in, 19.28, 19.29 see also under unincorporated members’ club, claim by below time limits— common law, at, 19.40 extension, 19.42 legislation governing, 19.40 limitation periods, 19.41 unincorporated members’ club, claim by— costs order, enforcement, 19.30 defence see defending claim above representative action— binding nature of resulting order, 19.10 differing interests, 19.8 enforcement of order etc, 19.10, 19.28, 19.29 generally, 19.8–19.10 implied consent of members, 19.9 legislation governing, 19.8 non-parties’ rights, 19.10 officers as representatives, 19.8 powers of representative, 19.10 proper selection and description, 19.9 trustees, 19.11 who may bring claim, 19.7 Club meaning, 1.1 admission see Admission business, carrying on, 5.57 cash basis see Cash basis classification, 1.5–1.7 criteria to be fulfilled, 1,1 decisions by see Decision examples, 1.1 historical background, 1.3–1.4 loose use of term in commercial circles, 1.2 members’ see Unincorporated members’ club membership see Membership

553

Index Club – contd non-clubs, nature of— co-operative society, 1.6 credit union, 1.6 incorporated friendly societies, 1.6 trade unions, 1.6 number of categorised clubs, 1.8, 1.14, 1.17, 1.26, 1.37, 1.49 other terminology, 1.1 shop, 1.6 unincorporated members’ club see Unincorporated members’ club use of term, 1.68 working men’s see Working men’s club Club premises certificate advantages, 9.13 appeal— Crown Court, to, 9.68 generally, 9.67 magistrates’ court, to, 9.68 application— accompanying documents, 9.14 fee, 9.70 generally, 9.14 inspection of premises, 9.16 operating hours, need to show, 9.18 operating schedule, need for, 9.17, 9.18 plan of premises, need for, 9.15 procedure, 9.14 representations, right to make, 9.19 to whom made, 9.14 associate member: meaning, 9.34 change of name, address or rules, 9.26 duration, 9.10, 9.28 duty to keep and produce, 9.24 early morning alcohol restriction order, 9.22 fee, 9.10, 9.70 form, 9.23 generally, 9.10 good faith, test, 9.11, 9.12 grant— conditions on, 9.20, 9.21 criteria for, 9.10 mandatory conditions on, 9.21 guests and visitors, sale to, 9.33, 9.34 loss, 9.25 off sales, 9.32 police entry powers, 9.35 premises licence, in combination with, 9.37 qualifying club conditions, 9.11 recognised club: meaning, 9.34 responsibility for keeping, 9.24 review, 9.29 statistics, 9.10, 11.22 statutory inclusion under 2003 Act, 9.36

Club premises certificate – contd summary— display, 9.24 loss, 9.25 surrender, 9.30 temporary events, holding, 9.53 variation, 9.27 withdrawal, 9.31 Commercial club gaming in, 12.69 proprietary club see Proprietary club Committee see Managing committee Community amateur sports club ability, lack of, as reason for refusing membership, 4.18 advantages, 1.59 amalgamation, 3.12 amateur status— criteria for determining, 1.53 income condition, 1.55 ordinary benefits: meaning, 1.54 civil proceedings by— generally, 19.18, 19.38 see also Civil proceedings constitution and objects, 2.40 discrimination, 1.51 dissolution— generally, 3.28 members’ liability on, 3.40 generally, 1.62 income condition, 1.55 insolvency, 3.58 internal disputes, settling, 5.108 legal structure, summary, 1.71 Table 1 legislation governing, 1.47 membership fee— limits on, 1.50 range, for different reasons, 1.51 whether excessive, 1.50 multi-sports club, 1.57 occasional participation: meaning, 1.56 open to whole community— meaning, 1.50 discrimination, 1.51 examples, 1.52 fees see membership fee above generally, 1.50–1.52 requirement for registration, 1.49 participating membership, 1.56 qualification as, 1.48 qualifying sport, 1.48 registration— appeal against refusal, 1.58 application, 1.58 Charity Commission, with, 1.48 HM Revenue & Customs, with, 1.48, 1.58 multi-sports club, where, 1.57

554

Index Community amateur sports club – contd registration – contd names and addresses of clubs, publication, 1.58 permanent nature, 1.49 refusal, 1.58 right of, requirements, 1.49 social membership, 1.56 statistics as to numbers, 1.49 taxation, 17.19 Community club advantages, 1.21, 1.59, 1.61 amalgamation, 3.8 benefit to community, need for, 1.19 borrowing powers, 5.50 business rates, 17.47 charitable incorporated organisation, conversion into, 1.24 civil proceedings by— generally, 19.14, 19.34 see also Civil proceedings company, conversion into— power to convert, 1.24 see further Company club constitution and objects, 2.36 corporation tax, 17.1, 17.6 criminal offence— liability for commission, 18.11 see also Criminal offence criteria to be satisfied, 1.19, 1.20 disadvantages, 1.22 disputes, dealing with, 1.21 dissolution— amalgamation, on, 3.8 liability of members on, 3.34 methods, 3.21 property, division on, 8.17 rules as to, 1.21 duties, 1.21 employer, as— generally, 16.4 see further Employment examples, 1.20 formation— criteria to be satisfied, 1.19, 1.20 procedure, 1.23 governance, 1.60 historical background, 1.17 insolvency— administration order, 3.51 disqualification of officers and committee, 3.50 generally, 3.49 legislation governing, 3.49 internal disputes, settling, 5.104 legal structure, summary, 1.71 Table 1

Community club – contd liability— contract, 13.20 tort, 13.66 managing committee see Managing committee powers, 1.21 principal, identifying, 5.57 property, ownership— dissolution, beneficial ownership on, 8.16 generally, 8.14–8.16 nominees, payment, 8.15 shares, 8.15 trustees, 8.14 registration— cancellation, effect, 3.22 condition for, 1.19 shares in, 1.19 statutory authority, 1.19 tenancy held by, 15.5 unregistered society, as, 3.22 Community interest company accounts, 17.11 amalgamation, 3.10 asset lock, 1.37 borrowing powers, 5.52 charitable incorporated organisation, conversion into, 1.42 civil proceedings by— generally, 19.16, 19.36 see also Civil proceedings constitution and objects, 2.38 conversion into, 1.42 directors— control by, 5.40 insurance to protect, 5.41 dissolution— generally, 3.26 members’ liability on, 3.38 formation and registration, 1.41 generally, 1.37, 1.62 insolvency, 3.55 internal disputes, settling, 5.106 legal structure, summary, 1.71 Table 1 liability in contract, 13.22 numbers, 1.37 property, ownership, 8.21 quorum, 6.33, 6.35 statutory authority, 1.37 structure, 1.37 Company club accounts— community interest company, 17.11 directors’ responsibility, 17.7 Financial Reporting Standard, 17.7, 17.8 generally, 17.7, 17.8

555

Index Company club – contd accounts – contd legislation governing, 17.7 micro-entity, 17.10 property revaluation, 17.8 requirements, 17.7 small company, 17.9 time for filing, 17.7 advantages of incorporation, 1.38, 1.59 amalgamation, 3.9 borrowing powers, 5.51 business rates, 17.47 civil proceedings by— generally, 19.15, 19.35 see also Civil proceedings community club— conversion from, 1.25 conversion into, 1.42 community interest company see Community interest company constitution and objects, 2.37 contracts by see under director below contractual relationship, laws governing, 1.26 control by directors— committee and board not identical, 5.33 generally, 5.32–5.34 Model Rule, article 4, 5.34 special resolution to control directors, 5.34 see also director below criminal offence— liability for commission, 18.11 see also Criminal offence director— meaning, 5.32 care, skill and diligence, required standard, 5.36 conflict of interest with members, 5.38 contract— legal duty, 13.24 non-existent company, where, 13.27 protection, 13.25 third party protection, 13.26, 13.27 control by see control by directors above financial duties, 5.37 general duties, 5.35, 5.36 inactive, 5.39 lack of statutory definition, 5.32 statutory duties, 5.35 disadvantages of incorporation, 1.39 dissolution— compulsory winding up, 3.23, 3.25 generally, 3.23

Company club – contd dissolution – contd members’ liability on— generally, 3.35 guarantee, where limited by, 3.37 shares, where limited by, 3.36 methods, 3.23 voluntary winding up, 3.23, 3.24 employer, as— generally, 16.4 see further Employment formation, 1.40 general meeting— minutes, 6.49 quorum, 6.33, 6.35 see also General meeting governance, 1.60 guarantee, limited by— advantages, 1.59 amount of guarantee, 1.30 corporate structure, 1.32 generally, 1.30–1.32 grants and awards from public funds, 1.31 limits on liability, 1.30 membership rights etc, 1.31, 1.32 Model Articles, 1.32 insolvency— administration order, 3.54 directors— disqualification, 3.53 liability, 3.52 generally, 3.52 liability on— directors, 3.52 members, 3.35 property, distribution on, 8.19, 8.20 internal disputes, settling, 5.10 legal nature, 1.26 legal structure, summary, 1.71 Table 1 liability— contract— director’s legal duty, 13.24 generally, 13.21 non-existent company, with, 13.27 protection of director, 13.25 third party protection, 13.26, 13.27 tort, 13.67 management see control by directors above meeting— electronic meetings, 6.59 poll at, 6.40 statutory requirements, 6.57–6.59 written resolutions, 6.58 see also General meeting; Meeting membership list, 5.100 micro-entity, 1.35, 1.36

556

Index Company club – contd principal, identifying, 5.57 private company, 1.33 property, ownership— beneficial ownership, 8.17–8.20 generally, 8.17–8.20 insolvency, on, 8.19, 8.20 lack of rights, 8.19 purchase or gift, acquisition through, 8.17 rules as to, 8.18 secured creditor’s rights, 8.19 silence in rules, effect, 8.3, 8.19 third parties, transfer to, 8.20 trust, beneficiary under, 8.19 register of members, 5.100 shares, limited by— alcohol sales, 1.28 exit of members, 1.29 generally, 1.27–1.29 grants and awards, restriction on right to, 1.31 issue of shares, 1.29 non-members holding shares, 1.28 prospective member wishing to join, 1.29 redeemable shares, issue, 1.29 small company, 1.34, 1.36 statutory authority, 1.25 tenancy held by, 15.5 Constitution see Rules Contract company club, with see under Company club (director) employment, of see under Employment third party liability see under Third party liability unincorporated club see under Unincorporated members’ club Copyright see Entertainment Coronavirus pandemic meetings— electronic, 6.20 general, deferral of, 6.3 supply and sale of alcohol, 9.7 supply and sale of food, 10.2 VAT rate on provision of food and drink, 17.31 Corporation tax allowable expenses, 17.13 charitable club, 17.18 community amateur sports club, 17.19 compliance, 17.17 criminal offence, 18.31 depreciation, 17.13 direct costs and overheads, apportionment, 17.13 dormant club, relaxation of rules, 17.17

Corporation tax – contd filing requirements, 17.17 generally, 17.12 mutuality, 17.14 non-mutual trading, 17.15 non-members, income from, 17.16 payment, time for, 17.17 proprietary club, 17.20 taxable profits, calculation, 17.13 Criminal offence accusation, dealing with, 18.1 alcohol licensing— club rules, alteration, 18.22 due diligence, defence, 18.20 legislation governing, 18.18 officer or member’s guilt, 18.19, 18.21, 18.22 types of offence, 18.18 unauthorised licensable activities, 18.18 civil sanctions, alternative, 18.32, 18.33 constitutional matters, 18.16 copyright, infringement of, 11.10 corporate body, 18.11 corporate manslaughter, 18.34 food law— civil sanctions, 18.33 due diligence, defence, 18.25 gross negligence manslaughter, 18.26 legislation governing, 18.23 serious offence, 18.26 third party, offence due to, 18.24 gambling, 18.27 generally, 18.1 health and safety, 18.29, 18.30, 18.33 landlord and tenant matters, 18.28 managerial matters, 18.17 serious crime prevention order, 18.35 smoking ban, 18.30 taxation matters, 18.31 television, use without licence, 11.23 unincorporated body— capacity for prosecution, 18.2 generally, 18.2 members’ club see Unincorporated members’ club (criminal offence) vicarious liability— due diligence, defence, 18.15 employee, offence by, 18.12 generally, 18.12 knowledge, lack of, 18.13, 18.14 member, offence by, 18.12 statutory obligations, 18.15 strict liability, 18.15 D Data protection access to data, member’s, 5.92

557

Index Data protection – contd Brexit, effect, 5.83 controller— meaning, 5,91 Information Commissioner, notification to, 5.94 request to, 5.93 co-option, discussion as to, 5.93 data processing— meaning, 5.88 fees payable, 5.95 exemptions, 5.90 generally, 5.82, 5.84 Information Commissioner— complaint to, 5.92 notification to, 5.94 powers, 5.82 legislation governing, 5.82 manual filing system, data in, 5.89 membership list see Membership list personal data— meaning, 5.86 processing, fair and lawful, 5.87 sensitive, 5.87 principles, 5.85 processor: meaning, 5.91 request for data, 5.93 Decision, club’s courts’ reluctance to intervene, 14.9 discrimination claims affecting livelihood, 14.15 judicial review— code of practice, 14.12 generally, 14.8, 14.9 grounds, 14.11 livelihood claims, 14.10 Pre-action Protocol, 14.12 public body, elements comprising, 14.8 remedies available, 14.14 remedy of last resort, as, 14.9 restraint of trade, 14.10 right to work, 14.10 standing or interest, need for, 14.8 time limits, 14.13 third party challenge to— examples, 14.2 express contract, decision made under, 14.4, 14.5 generally, 14.1–14.3 implied submission to club’s jurisdiction, 14.6, 14.7 judicial review see judicial review above natural justice, rules, 14.5 relationships giving rise to, 14.4 Defamation meaning, 13.59 club not legal person, 13.65

Defamation – contd common law, at, 13.59 defence, 13.60, 13.61, 13.63, 13.64 legislation governing, 13.60 liability, 13.59, 13.65 litigation, 13.65 malice, with, 13.65 non-defamatory statement 13.60 noticeboard, on, 13.62, 13.63 privilege, as defence, 13.61 website publication, 13.60, 13.64 Disciplinary proceedings case law, 7.36 generally, 7.36 human rights law, and, 7.36 reprimand, 7.39 rules, powers in, 7.36 sanctions— appeal— ad hoc, 7.37 constitution of tribunal on, 7.37 re-hearing on, 7.37 representation on, 7.37 right to, 7.37 right to impose, 7.36 warning, 7.39 Discrimination age, concessions as to, 4.23 associates, 5.73, 5.74, 5.81 child, 5.77 direct, 4.23 disability— access, improvement, 5.78, 5.79 direct, 5.72 disabled person: meaning, 5.78 health and safety risks, 5.81 leasehold premises, where, 5.80 pregnant woman, 5.81 reasonable adjustments, duty to make, 5.78–5.80 employment, in see under Employment gender, 5.77 generally, 5.71, 5.72, 7.40 guests, 5.75, 5.76, 5.81 indirect, 4.23 landlord and tenant matters— disability discrimination and occupation, 15.45 disposal of property, 15.40–15.42 gender reassignment, 15.43 harassment, 15.42, 15.44 legislation covering, 15.39 management of property, 15.43, 15.44 protected characteristics, exemption for, 15.41 unlawful discrimination, examples, 15.40 victimisation, 15.43

558

Index Discrimination – contd lawful, 4.17 legislation governing, 5.71 livelihood, claim affecting, 14.15 membership, affecting, 7.40 protection against, 7.40 qualification body, by, 14.15 unlawful— application of legislation, 4.20 generally, 4.19, 5.72 harassment, 4.24 protected characteristics, 4.21 remedies, 4.26 single characteristic associations, 4.22 victimisation, 4.25 Dissolution amalgamation of clubs, on— charitable club, 3.11 community amateur sports club, 3.12 community club, 3.8 community interest company, 3.10 company club, 3.9 generally, 3.3 literary and scientific institution, 3.13 merger, 3.3 proprietary club, 3.14 unincorporated members’ club, 3.4–3.6 working men’s club, 3.7 community club see under Community club generally, 3.1, 3.2 inactivity leading to, 3.18 liability of members on, 3.31–3.42 positive acts prior to, 3.18 rules— case law, 3.2 foresight in drafting, need for, 3.2 generally, 3.15 lack, 3.1 need for, 2.10, 3.2 spontaneous, 3.18 unincorporated members’ club see under Unincorporated members’ club working men’s club, 1.15, 3.20 Duty of care child, to see Child (protection) managing committee see under Managing committee third parties, to see Negligence E Employment meaning, 16.2 continuous— managing committee, change in composition, 16.10

Employment – contd continuous – contd part-time employment counting towards, 16.9 periods of leave etc not breaking, 16.9 preservation, 16.10 technical rules, 16.9 transfer of employee, 16.10 weeks counting towards, 16.9 contract— continuous employment see continuous above essential requirements, 16.2, 16.3 generally, 16.5–16.7 implied terms, 16.8 importance, 16.5 job description, 16.7 notice of terms agreed, 16.7 pay, 16.14, 16.72 sex equality clause, 16.72, 16.74, 16.76 termination see termination below whether arising, 16.3 written, advisability, 16.5 written statement of particulars, provision, 16.6 detriment, right not to suffer— complaint to employment tribunal, right to make, 16.33 generally, 16.33 health and safety activities, 16.35 trade union activities, 16.34 whistleblowing, 16.36 Disclosing and Barring Service, 16.80 discrimination— claim, time for bringing, 16.70 direct, 16.65, 16.71 disability, 16.69 employer’s vicarious liability, 16.64 equal pay— arrears of pay or damages, as remedy, 16.76 defence of material factor, 16.74 equal work, types, 16.73 generally, 16.72 incapacity claim, 16.76 legislation governing, 16.72 non-contractual pay and benefits, 16.72 pay secrecy clause, 16.75 remedy, 16.76 right to, 16.72 sex equality clause, 16.72, 16.74, 16.76 time limit for bringing claim, 16.76 work of equal value, claim based on, 16.74

559

Index Employment – contd discrimination – contd generally, 16.60–16.63 harassment, 16.67 impermissible question on recruitment, 16.71 indirect, 16.66, 16.70 legislation governing, 16.60–16.63 protected characteristics, 4.21, 16.61 purpose of legislation, 16.61 reference, poor or inaccurate, 16.78 remedy— damages, 16.70 direct discrimination, where, 16.71 indirect discrimination, where, 16.70 measure of compensation, 16.70 recommendations, 16.70 unlawful, matters constituting, 16.62, 16.63 victimisation, 16.68 employer, identifying, 16.4 fixed-term employee— complaint to employment tribunal by, 16.13 right to become permanent employee, 16.12 treatment, 16.12 generally, 16.1 government website, advice etc, 16.1 health and safety at work— breach of duty, right to damages, 16.40 common law duty, 16.37, 16.38, 16.39 competent fellow employees, duty to provide, 16.39 compulsory insurance, 16.41 criminal offence, 18.29, 18.30 detriment for activities, right not to suffer, 16.35 generally, 16.37–16.40 legislation governing, 16.37, 16.38, 16.39 safe equipment and materials, right to, 16.39 safe place of work, right to, 16.39 safe system of work, right to, 16.39 smoking ban, 18.30 statutory duties, 16.38 maternity leave— additional, 16.28 compulsory, 16.25 ordinary, 16.26 return to work following, 16.27 right to, 16.24 occupational pension scheme, 16.72 parental leave, 16.31

Employment – contd part-time employee— complaint to Employment Tribunal by, 16.13 treatment, 16.11 paternity leave, 16.30 pay— contract of employment, in, 16.14 deductions, 16.22 discrimination see under discrimination above equal see under discrimination above generally, 16.14 holiday, 16.16 maternity, 16.18–16.20, 16.24 minimum wage, 16.15 NIC, 16.23 non-contractual pay and benefits, 16.72 paternity, 16.21 PAYE, 16.23 sex equality, 16.72, 16.74, 16.76 shared statutory parental pay, 16.20 sick, 16.17 redundancy— meaning, 16.56 generally, 16.56–16.59 legislation governing, 16.56 payment— amount, 16.57 excluded employees, 16.58 length of employment required, 16.57 restriction on right to, prohibition, 16.56 right to, 16.56, 16.57 time limit for claim, 16.59 unfair dismissal, as reason for, 16.59 reference— checking, 16.77 contents, 16.79 defamation, 16.78 Disclosing and Barring Service, 16.80 general, 16.79 honest and accurate, 16.78 liability, 16.78 negligent misstatement, 16.78 private and confidential, marking as, 16.78 shared parental leave, 16.29 termination— modes. 16.42 redundancy see redundancy above unfair dismissal see unfair dismissal below wrongful dismissal, 16.43 time off work, 16.32

560

Index Employment – contd unfair dismissal— capability dismissal, 16.51 compensation for— increase or reduction, 16.55 reinstatement or re-engagement, instead of, 16.55 right to, 16.44 fairness or otherwise of dismissal, 16.50, 16.51 health and safety reasons, 16.50 internal appeal, 16.51 legislation governing, 16.44 misconduct dismissal, 16.51 natural justice, application of rules, 16.51 preconditions for claim— dismissal, 16.46 generally, 16.45 qualifying period, 16.47 protection against, 16.44 protection of co-workers, for, 16.50 range of reasonable responses, whether dismissal within, 16.51 reasonable investigation, need for, 16.51 reasons— acceptable, 16.49, 16.51 establishing, 16.48 health and safety, 16.50 redundancy, 16.59 unfair, 16.50 remedies, 16.53–16.55 representation etc at disciplinary meeting, 16.52 restriction in bringing claim, prohibition, 16.45 warnings, lack of, 16.51 unincorporated members’ club— change to corporate status, 16.1 managing committee as employer, 16.4 worker— meaning, 16.82, 16.83 autonomy, effect, 16.84 case law, 16.84 examples, 16.83, 16.84 exclusions, 16.83 generally, 16.81 rights, 16.85 Entertainment abatement notice, 11.24 authorisations etc, procedures as to— films, mandatory condition, 11.19 generally, 11.18 plays, prohibited condition, 11.20 statistics, 11.22 statutory guidance, 11.21 book, publication, statutory duty, 11.11

Entertainment – contd copyright— meaning, 11.2 breach— case law, 11.5 remedies, 11.9 collective management organisation, grant by, 11.7 duration, 11.8 fair dealing, 11.3 legislation governing, 11.2 offences, 11.10 Phonographic Performances Ltd licence, 11.6 PRS for Music licence, 11.7 public performance, 11.5 scope of protection, 11.2, 11.4 television and radio broadcasts, 11.6 works covered by, 11.2 generally, 11.1 noise nuisance, 11.24 regulated entertainment— categories, 11.12, 11.13, 11.14 exemptions, 11.16, 11.17 generally, 11.12 legislation governing, 11.12 threshold test, 11.15 statistics as to number of events held, 11.22 television licence, need for, 11.23 Entry powers drugs offences, 9.35 premises licence, in connection with, 9.49 reasonable force, use, 9.35, 9.49 sale or supply of alcohol, in connection with, 9.35 small society lottery, enquiries as to, 12.59 temporary event premises, 9.61 Expulsion see Membership F Food criminal offence see Criminal offence (food law) supply and sale see Supply and sale of food G Gambling meaning, 12.2 betting see Betting criminal offence, 18.27, 18.33 Gambling Commission’s role, 12.5, 12.19 gaming see Gaming inspection of premises, 12.36 legislation governing, 12.1

561

Index Gambling – contd lottery see Lottery proprietary club, in, 12.69 Gaming meaning, 12.6 betting see Betting bingo— exempt equal-chance, 12.37 exemption from bingo duty, where, 12.37 generally, 12.37, 12.68 incidental lottery, 12.37 non-commercial equal-chance, 12.37 operating licence, 12.37 child: meaning, 12.4 commercial club— meaning, 12.3 generally, 12.69 equal-chance— bingo, 12.37 exempt see exempt equal-chance below generally, 12.7 non-commercial see non-commercial equal-chance below exempt equal-chance— admissibility, 12.9 bingo, 12.37 Code of Practice, 12.11 conditions, 12.10, 12.13 examples, 12.9 generally, 12.9 no gaming duty where, 12.9 prize gaming, 12.12, 12.13 game of chance, examples, 12.6 generally, 12.1–12.8 inspection of premises, 12.36 legislation governing, 12.1 licence, need for— bingo, 12.37 generally, 12.8 machine— meaning, 12.20 classes, 12.20 exception for— generally, 12.20 limited-prize machine, 12.22 no-prize machine, 12.21 play-again machines, 12.22 generally, 12.20 licence for, 12.20 offence, 12.20 permit— application for, 12.23 conditions, 12.24 generally, 12.20 members’ club: meaning, 12.3

Gaming – contd non-commercial equal-chance— meaning, 12.14 bingo, 12.37 conditions for, 12.16 Gambling Commission’s advice, 12.19 generally, 12.14 private gain, lack of, 12.14, 12.15 race night, 12.18 non-commercial prize gaming— conditions for, 12.17 race night, 12.18 permit— annual fee, 12.35 appeals, 12.34 application— fast-track, 12.29 fee, 12.35 generally, 12.27 procedure, 12.28 refusal of application, 12.28 cancellation, 12.32 club gaming, 12.25, 12.26 conditions, 12.26 duration, 12.31 fees, 12.35 forfeiture, 12.33 form, 12.30 generally, 12.2 machine, for see under machine above procedure for obtaining see application above renewal, 12.31, 12.35 prize: meaning, 12.6 temporary use notice, 12.38 unequal-chance, 12.7 unlawful nature, 12.8 young person: meaning, 12.4 General meeting agenda, 6.25 chairman at see under Meeting irregularly called, where, 6.11 notice— common period, 6.11 contents, 6.11 electronic service, 6.15–6.19 failure to serve one member, 6.13 non-receipt, 6.14 postal service, 6.15, 6.16, 6.19 proper, 6.10–6.13 rules as to, 6.11 time, computation, 6.12 proprietary club, 6.60 quorum see under Meeting resolutions, members’, 6.31 voting see under Meeting Guest alcohol, provision, 4.37

562

Index Guest – contd discretion as to admission, 4.36 discrimination, 4.39 gambling, 4.38 generally, 4.36 terms, determining, 4.36 H Harassment admission into club, unwanted conduct, 4.24 discrimination, 15.42, 15.44 Historical introduction, 1.3 I Incorporated club tort, liability in— community club, 13.66 company club, 13.67 defamation, 13.71 director’s, 13.70, 13.71 Industrial and provident society community club, replacement by see Community club focus, widening, 1.18 historical background, 1.17 purpose, 1.18 working class focus, 1.18 Insolvency charitable incorporated organisation see under Charitable incorporated organisation community club see under Community club community amateur sports club, 3.58 community interest company, 3.55 company club see under Company club legal advice, need for, 3.43 literary and scientific institution, 3.59 proprietary club see under Proprietary club unincorporated members’ club see under Unincorporated member’s club working men’s club, 3.48 Internal disputes arbitration, agreement to accept, 5.101 charitable incorporated organisation, 5.107 community amateur sports club, 5.108 community club, 5.104 community incorporated club, 5.106 company club, 5.105 generally, 5.101 proprietary club, 5.109 stay of court proceedings, 5.101 unincorporated members’ club, 5.102 working men’s club, 5.103

L Landlord and tenant adverse possession, title by, 15.3 criminal offence, 18.28 discrimination see under Discrimination generally, 15.1, 15.2 lease see Tenancy licence— club as licensee, 15.47 club as licensor, 15.48 contractual, need for, 15.47 drawbacks, 15.47, 15.48 eviction, protection from, 15.49 examples, 15.46 generally, 15.46 service occupier, 15.48 tenancy distinguished, 15.46 terminology, need for correct use, 15.48 trespassers, protection for, 15.49 proprietary club, 15.50 tenancy see Tenancy Lease see Tenancy Levy see Cash basis Libel see Defamation Liability third party see Third party liability Literary and scientific institution amalgamation, 3.13 borrowing powers, 5.54 civil proceedings by— generally, 19.12, 19.32 see also Civil proceedings constitution and objects, 2.34 dissolution— generally, 3.29 members’ liability on, 3.41 generally, 1.64, 1.65 insolvency, 3.59 legislation governing, 1.64 property, ownership, 8.23 tenancy held by, 15.5 Litigation see Civil proceedings Lottery meaning, 12.39 betting, as, 12.67 bingo, 12.37, 12.68 child taking part— child: meaning, 12.4 substitute prize, where appropriate, 12.61 commercial club: meaning, 12.3 complex, 12.39 draw— child taking part in, 12.61 equal chance of winning, need for, 12.61 reverse value, 12.61

563

Index Lottery – contd duty payable, 12.62 examples, 12.39, 12.40 exempt, 12.43 gaming, overlap, 12.68 generally, 12.1–12.5, 12.39–12.42 incidental— bingo as, 12.37 conditions for promoting, 12.45 generally, 12.44 lawful nature, 12.44 licensable activity, not constituting, 12.46 legislation governing, 12.1 members’ club: meaning, 12.3 operating licence, 12.62 payment to participate, 12.41 permit, need for, 12.2 private society— authority to promote, 12.47 conditions, 12.48 generally, 12.47 prize: meaning, 12.41 promotion, whether lawful, 12.42, 12.43 race night, 12.68 simple, 12.39 small society— ambit, 12.49 annual fee, 12.57 conditions, 12.50 entry powers, 12.59 generally, 12.49 records, 12.58 registration— annual fee, 12.57 appeals, 12.56 application, 12.53 cancellation, 12.55 local authority: meaning, 12.52 refusal of application, 12.53 requirement. 12.49, 12.51 revocation, 12.54 unclaimed prizes, 12.60 young person: meaning, 12.4 M Management auditor, 5.18 branches and sub-clubs, 5.20 cash basis see Cash basis charitable club, 5.42 community club see Managing committee company club see Company club (control by directors) delegation to officers and committee, need for, 5.1 discrimination see Discrimination

Management – contd generally, 5.1 incorporated club see Company club (control by directors) internal disputes see Internal disputes managing committee see Managing committee money, power to borrow see Borrowing powers officers see Officer personal injury claim see Personal injury claim proprietary club, 5.43 trustees, 5.19, 5.42 unincorporated club see Managing committee Managing committee bankruptcy of member, 5.23 cash basis, need to operate on see Cash basis company club see Company club (control by directors) conflicts of interest, 5.26 co-option of member— discussion as to, data protection, 5.93 express power, need for, 5.25 until next AGM, 5.15 court’s intervention in internal matters, 5.27, 5.28 delegation by, 5.25 duty of care to club and members— absent committee member, whether liable, 5.61 agency under contract of membership, 5.57 business nature of relationship, 5.57 collective responsibility, acceptance, 5.61 damages, liability for, 5.60 dissenting committee member, 5.61 failure or omission to take action, 5.59 generally, 5.56 ignoring legal advice, 5.60 lease, failure to renew, 5.59 principal, identifying, 5.57 standard of care, determining, 5.58 election and tenure, 5.22 employer, as— change in composition, 16.10 generally, 16.4 see further Employment exercise of powers, 5.25 expulsion by members, 5.30 expulsion of member by— generally, 7.11 see also under Membership (expulsion)(members’ club) generally, 5.21

564

Index Managing committee – contd insurance, advisability, 18.10 legislation governing, 5.21, 5.22 meeting— chairman, 6.55 generally, 6.55, 6.56 procedural rules, 6.55 proxy voting, absence, 6.55 quorum, 6.55 right to convene, 6.55 sub-committee, 6.56 no-confidence vote— committee ignoring, 5.30 generally, 5.29, 5.30 special meeting, 5.30 non-attendance by member, penalty, 5.22 removal— members, by, 5.30 statutory power, 5.31 sub-committee, 5.24, 5.25, 6.56 vacation of office, through nonattendance, 5.59 Meeting adjournment, 6.28 agenda, 6.25 annual see Annual general meeting attendance at, controlling, 6.22–6.24 chairman at— absence, 6.26 adjournment of meeting, 6.28 amendments to motions, 6.29 casting vote, 6.47, 6.48 duties, 6.27 election, where necessary, 6.26 generally, 6.26 committee see under Managing committee company club see under Company club coronavirus pandemic, during, 6.3, 6.20 disorderly conduct at, 6.24 electronic, 6.20, 6.21 general see General meeting generally, 6.1 implied right to convene and hold, 6.1 informal, 6.9 managing committee see under Managing committee minutes— committee meetings, 6.49 contents, 6.49, 6.51 correction, 6.52 defamation, 6.54 distribution, 6.53 general meeting, 6.49 generally, 6.49–6.51 inspection, 6.49 purpose, 6.49

Meeting – contd minutes – contd recording methods, 6.50 signing, 6.52 motions at, amendments to, 6.29, 6.30 proprietary club, 6.60 quorum— meaning, 6.32 absence of rule as to, 6.32 generally, 6.32–6.34 holding meeting, for, 6.34 minimum number, 6.33 period of grace, 6.35 requisitioning general meeting, for, 6.34 resolutions, members’, 6.31 special see Special meeting strangers at, 6.22, 6.23 voting— acclamation, 6.37 ballot, 6.41 casting, 6.47, 6.48 equal voting rights, 6.43 majority— abstainers, 6.46 amendment of bye-laws, 6.44 case law, 6.46 simple, 6.44, 6.45, 6.46 three-quarters, 6.44, 6.45 two-thirds, 6.44 methods, 6.36 poll, 6.39, 6.40 proxies, 6.42 show of hands, 6.38 Speaker Denison’s Rule, 6.48 Membership admission see Admission application for, offer and acceptance, 2.8 cash basis see Cash basis categories— affiliates, 4.16 associate members, 4.14 generally, 4.6 honorary members, 4.12 junior members, 4.13 life members, 4.10, 4.11 ordinary members, 4.7–4.9 temporary members, 4.15 cessation— expulsion see expulsion below generally, 7.1 lapsed membership see lapsed below moribund membership, 7.4 resignation see resignation below contract, breach of term, 5.27, 5.28 co-option to office see under Managing committee curtailment see cessation above

565

Index Membership – contd disciplinary proceedings see Disciplinary proceedings discrimination see Discrimination entrance fee, on payment of— generally, 2.8, 4.28 power to fix, 4.29 refund, 4.34 see also Subscription expulsion— appeal— ad hoc, 7.37 constitution of tribunal on, 7.37 re-hearing on, 7.23, 7.24, 7.37 representation on, 7.37 right to, 7.37 bias, rule against, 7.21 burden of proof, 7.17 change of grounds for, 7.17 court’s power to override, 7.12, 7.13 effect, 7.32 errors, correcting, 7.22 evidence, 7.17 express power, need for, 7.10, 7.11 forced resignation, 7.5 fresh hearing, 7.22 good faith, need for, 7.19 hearing, 7.17 invalidity, declaration as to, 7.33 jurisdiction, 7.12, 7.13 legal representation, 7.17 limits on committee’s powers, 7.13 managing committee’s power, 7.11 natural justice, rules, 7.20 premises, exclusion from, 7.11 procedure, need to follow, 7.14–7.16 proprietary club, 7.30 quorum and voting majority, 7.18 retrospective, 2.31 wrongful, remedies— damages, 7.27–7.29 generally, 7.25–7.29 injunction, 7.26 reinstatement, effect, 7.30 guests and visitors see Guest lapsed— generally, 7.8, 7.9 non-payment of subscription, 7.8, 7.9 reinstatement, 7.9 list see Membership list maximum numbers, 4.3 privileges, deferment, 4.27 rejection, reasons for— ability, lack of, 4.18 discrimination see Discrimination harassment, 4.24 lawful discrimination, 4.17 victimisation, 4.25

Membership – contd resignation— enforced, 7.6 express, 7.2, 7.3 forced, 7.5 inactive member, 7.4 invitation to resign, 7.7 no special wording required, 7.3 obligations following, 7.3 re-election following, 7.2, 7.3 requested, 7.5 right, 7.2, 7.3 tacit, 7.4 waiver, 7.3 withdrawal by mutual consent, 7.9 subscription see Subscription suspension— absence of rule, 7.32 appeal— ad hoc, 7.37 constitution of tribunal on, 7.37 re-hearing on, 7.37 representation on, 7.37 right to, 7.37 committee, subsequent election to, 7.32 consequences, 7.32–7.34 definite period, for, 7.34 drink/driving offences, following, 7.35 effect on membership, 7.32 generally, 7.31 liabilities during, 7.33 partial, 7.35 rights during, 7.33 rules, power in, 7.31 see also expulsion above Membership list committee, 5.98 company club, 5.100 data protection, 5.97 general, 5.96, 5.97 provision to members, 5.96, 5.97 website, on, 5.99 Merger see Dissolution Money cash basis see Cash basis power to borrow see Borrowing powers N Name club rules, 2.12, 2.13 ‘Limited’, omission of, 2.13 Negligence contributory, 13.57 duty of care— common, 13.47 nature of, 13.40

566

Index Officer – contd chairman – contd woman, where, 5.7 directors, 5.2 duties, whether need to specify, 5.3 election and tenure— contested election, 5.16, 5.17 co-option, 5.15 counting the vote, 5.17 generally, 5.2, 5.13, 5.14 methods of election, 5.13 nomination, 5.15 officer, of, from committee, 5.14, 5.15, 5.17 secret ballot, where advisable, 5.17 voting system, 5.16, 5.17 honorary, 5.3 managerial, 5.3 patron, 5.4, 5.5 president, 5.6, 5.13 secretary— contract of employment, 5.10 election, 5.13 generally, 5.9, 5.10 role, 5.9 treasurer— corporation tax, payment, 5.12 election, 5.13 generally, 5.11, 5.12 liaison with secretary, 5.12 payment, 5.11 role, 5.11, 5.12 vice-president, 5.6, 5.13

Negligence – contd exclusion of liability, 13.58 examples, 13.41 generally, 13.39, 13.40 nuisance, overlap with, 13.44 occupier’s liability— business occupier, 13.58 club not constituting occupier, 13.49 common duty of care, 13.47 generally, 13.47–13.49 independent contractor as occupier, 13.50 lawful visitor, 13.51 licence to enter, revocation, 13.51 member as occupier, 13.49 occupier: meaning, 13.48 residential or private, 13.58 trespasser, 13.52 trustee as occupier, 13.49 visitor: meaning, 13.50 personal injury claim, 5.65, 5.66, 5.67 principle, 13.40 proximity and foreseeability, 13.40 sports— generally, 13.53–13.55 minimisation of danger, 13.53 players’ rights and duty, 13.53, 13.54 referee’s duty, 13.53, 13.54 spectators’ safety, 13.56 Nuisance access to club, 13.45 escape, need for, 13.42 examples, 13.43 generally, 13.39, 13.42 interests in land, protection, 13.42 land and buildings adjoining highway, 13.46 negligence, overlap with, 13.44 noise, 11.24 right of way, use, 13.45 strict liability, 13.42 tree, 13.46 O Objects change, 2.15 club rules, 2.14, 2.15 name of club, reflected in, 2.12 Occupier’s liability see under Negligence Officer absence, 5.2 categories, 5.3 chairman— club, of, 5.8 election, 5.13 generally, 5.7, 5.8 managing committee, of, 5.8 role, 5.8

P Personal injury claim insurance against negligence, 5.67 member, by— apportionment of liability, 5.66 common duty of care, breach, 5.64 common law position, 5.63 contract law, under, 5.63 defective state of premises, 5.63, 5.64 duty of care, existence, 5.65, 5.66 generally, 5.62 negligence, 5.65, 5.66, 5.67 occupier’s liability, 5.63, 5.64 protection of committee, 5.67 tort, in, 5.63 ‘visitor’, whether member is, 5.64 proprietary club, 5.68 Personal licence (alcohol) application, 9.63 continuing duty under, 9.64 duration, 9.62 forfeiture or suspension, 9.64 generally, 9.62 grant, 9.63

567

Index Personal licence (alcohol) – contd number held at any time, 9.62 purpose, 9.62 temporary events, 9.65 Premises licence (alcohol) activities covered by, 9.37 appeal— closure of premises, as to, 9.69 Crown Court, to, 9.68 generally, 9.67 magistrates’ court, to, 9.68 application— accompanying documents, 9.38 applicant, 9.37 fee, 9.70 operating schedule, need for, 9.39 procedure, 9.38 representations, right to make, 9.40 to whom made, 9.38 closure of licensed premises— appeal, 9.69 power to close, 9.49 club premises certificate, in combination with, 9.37 designated premises supervisor: meaning, 9.41 duration, 9.48 early morning alcohol restriction order, 9.44 entry powers, police, 9.49 fee, 9.70 form, 9.45 generally, 9.37 increasing use, 9.37 mandatory conditions, 9.42, 9.43 proprietary club, 9.66 regulation, 9.37 review, 9.47 summary of certificate, issue, 9.45 temporary events, holding, 9.53 transfer, fee, 9.70 variation, 9.46 Property ownership— generally, 8.1 incorporated members’ club— charitable incorporated organisation, 8.22 community club see under Community club community interest company, 8.21 company club see under Company club literary and scientific institution, 8.23 proprietary club, 8.24 trusteeship see Trust

Property – contd ownership – contd unincorporated members’ club see Unincorporated members’ club (property) Proprietary club amalgamation, 3.14 borrowing powers, 5.55 business rates, 17.47 civil proceedings by— generally, 19.19, 19.39 see also Civil proceedings commercial club, as, 12.69 contract by or with, 13.28 contractual relationship with members, 1.69 dissolution— generally, 3.30 members’ liability on, 3.42 distinguished from general use of term ‘club’, 1.68 example, 1.68 expulsion, 7.30 formation, 1.71 gaming, 12.69 general meeting, 6.60 insolvency— generally, 3.60 legislation governing, 3.60 member as unsecured creditor, 3.60 trustee in bankruptcy, assets vesting in, 3.61 landlord and tenant position, 15.50 legal nature, 1.69 liability for debts or transactions, 1.70 name, passing-off action to protect, 1.68 objects clause, 2.41 ownership, 1.69 premises licence— need for, 9.66 see also Premises licence property, ownership, 8.24 proprietor— control by, 5.43 duty of care owed by, 5.68 liability etc, 1.69, 1.70 property owner, as, 8.24 purpose, 1.69 rules— amendment, 2.43 generally, 2.5 objects clause, 2.41 rule book, 2.42 social nature of membership, 1.69 taxation, 17.20 tortious liability, 13.72

568

Index R Regulations power to make, 2.16 Residential tenancy assured tenancy— access for repairs, 15.29 criminal offence, 18.28 defective premises, liability, 15.30 deposit, protection, 15.38 essential terms, statement of, 15.28 exclusion from protection, 15.34 fixed or periodic— meaning, 15.29 recovery of possession, 15.35, 15.37 fully— generally, 15.27 recovery of possession, 15.36 security of tenure, 15.31 qualification as, 15.28 recovery of possession— assured shorthold, 15.37 fixed term, where, 15.35 fully assured, 15.36 methods, 15.35 periodic, where, 15.35 repairing obligations, 15.29, 15.30 shorthold— generally, 15.27 recovery of possession, 15.37 security of tenure, 15.32 tenancy deposit scheme, 15.38 succession, 15.33 terms, agreement as to, 15.29 eviction, protection from, 15.49, 18.28 generally, 15.25 Housing Act 1988, 15.27 personal status of irremovability, 15.26 protected tenancy, 15.26 regulated tenancy, 15.26 Rent Act 1977, 15.26 statutory tenancy, 15.26 termination, protection from eviction, 15.49 trespassers, protection for, 15.49 Resignation see Membership Rules amendment— acquiescence in, 2.23, 2.29, 2.30 basic rule as to, 2.22–2.24 binding nature, 2.27, 2.28, 2.30 express power, need for, 2.22 fundamental rule— binding on objectors, whether, 2.27, 2.28 generally, 2.25–2.28 judicial analysis, 2.26 lack of power, potential problems, 2.24 Licensing Acts, clubs registered under, 2.24

Rules – contd amendment – contd procedure, 2.32 retrospective, 2.31 binding nature, 2.6–2.8 bye-laws, 2.16 contents— approach to determining, 2.11 complex organisation, where, 2.10 dissolution see Dissolution (rules) financial provisions, 2.10 foresight, need for, 2.11 generally, 2.9, 2.10 index to constitution or rules, 2.10 management, 2.10 membership, 2.10 miscellaneous, 2.10 name of club, 2.12, 2.13 objects, 2.14, 2.15 dissolution, for see under Dissolution express see contents above fundamental— amendment, 2.25–2.28 determining, as question of fact, 2.26 importance, 2.1 interpretation— customary rules, 2.19 dispute as to meaning, where, 2.21 flexibility, need for, 2.20 gender rule, 2.17 implied rules, 2.18 ‘play in the joints’, 2.20 scrupulous observance, where need for, 2.20 unwritten rules, 2.19 primacy, 2.1, 2.2 proprietary club— amendment of rules, 2.43 generally, 2.5 objects clause, 2.41 rule book, 2.42 regulations, 2.16 retrospective, 2.31 rule-making powers— byelaws, 2.16 members’ clubs, 2.3, 2.4 proprietary club see proprietary club above regulations, 2.16 statutory involvement— charitable incorporated organisation, 2.39 community amateur sports club, 2.40 community club, 2.36 community interest company, 2.38 company club, 2.37 generally, 2.33 literary and scientific institution, 2.34

569

Index Rules – contd statutory involvement – contd working men’s club, 2.35 well-drawn, need for, 2.1, 2.2 S Sinking fund see Cash basis Society co-operative, 1.6 use of term, 1.2 Special meeting business at, 6.6 convening, 6.7 correct legal name, 6.6 failure to convene, 6.8 generally, 6.6, 6.7 litigation, prior to, 19.2 no confidence vote, to pass, 5.30 purpose, 6.6 requisition for, number of members required, 6.7 rules for holding, 6.7 Specialised activities clubs with, 1.66 Sports see Community amateur sports club; see also under Negligence Stamp duty land tax acquisition or leasing of property, where, 17.41 generally, 17.41 payable, where, 17.41 rates, 17.41 residential and non-residential property, on, 17.41 Structure, legal factors affecting choice, 1.59 generally, 1.59–1.63 Subscription annual general meeting determining, 4.29 annual levy as, 4.28 arrears, 4.31 generally, 4.28, 4.29 increase in— powers as to, 4.29 reserve or sinking fund, to create, 13.19 shortfall in funds, to deal with, 13.19 special meeting, 13.19 instalments, payment by, 4.30 non-payment— arrears, right to sue for, 7.8 effect, 7.8 reinstatement on payment, 7.9 procedure for determining, 4.29 refund, 4.35 remission, effect on member’s rights etc, 4.33

Subscription – contd tax relief, 17.21 VAT, 17.33 waiver, 4.32 Supply and sale of alcohol appeals, 9.67–9.69 authorisations, 9.9 club premises certificate see Club premises certificate coronavirus pandemic, temporary closures during, 9.7 criminal offence see Criminal offence (alcohol licensing) entry powers, 9.35 generally, 9.1–9.5 legislation governing— generally, 9.1 objectives of 2003 Act, 9.4, 9.5 summary of reform, 9.2, 9.3 licensable activities, 9.6 offences, 18.18 personal licence see Personal licence premises licence see Premises licence proprietary club, 9.66 qualifying club activities, 9.8 responsible person: meaning, 9.21 supply to member not a sale, 9.3 temporary event notice see Temporary event notice warrant to enter premises, 9.35 Supply and sale of food allergies, 10.27, 10.28 coronavirus pandemic, during, 10.2 criminal offence see Criminal offence (food law) food safety and hygiene— Brexit, effect, 10.5 commercial operation: meaning, 10.6 food: meaning, 10.6 food business: meaning, 10.6 food business operator, 10.7, 10.8 food premises: meaning, 10.6 Food Safety Act 1990, ambit, 10.6 generally, 10.3, 10.4 historical background, 10.3 legal situation, 10.9 legislation governing, 10.5 sale of food: meaning, 10.6, 10.9 Food Standards Agency, advice from, 10.12 generally, 10.1 local authority, advice from, 10.12 local surveillance— entry powers, 10.23 generally, 10.17 hygiene emergency prohibition notice, 10.22

570

Index Supply and sale of food – contd local surveillance – contd hygiene improvement notice, 10.18, 10.19 hygiene prohibition order, 10.20, 10.21 legislation governing, 10.17 offences, 18.23 proper food, supply— food allergies, 10.27, 10.28 generally, 10.24 statutory protection of club member, 10.25, 10.26 registrationas food business operator— application, 10.10 duties of registered club, 10.11 food business: meaning, 10.6 food business operator: meaning, 10.7, 10.8 Food Standards Agency, advice from, 10.12 generally, 10.10 local authority, advice from, 10.12 notification requirements, 10.10 procedure, 10.10 time for registering, 10.10 risk assessment— generally, 10.13 legislation governing, 10.13 need for, 10.13 requirements for food premises, 10.14, 10.15 staff training, 10.16 Suspension see Membership T Taxation accounts— community club, 17.6 company club see under Company club unincorporated members’ club, 17.4 working men’s club, 17.5 business rates see Business rates corporation tax see Corporation tax criminal offences, 18.31 generally, 17.1 mutual trading, 17.2, 17.3 practical implications, 17.1 professional assistance, advisability, 17.1 sponsorship, income from, 17.13 stamp duty land tax see Stamp duty land tax subscriptions, tax relief, 17.21 types, 17.1 unincorporated cub, incorporating, 17.22, 17.23 VAT see VAT

Taxation – contd voluntary payments to preserve club, 17.13 Temporary event notice (alcohol) application, 9.50 closure of premises, 9.61 conditions, 9.50 counter notice, 9.50, 9.55, 9.56 discrimination, prohibition, 9.51 duty to keep, display and produce, 9.58 early morning alcohol restriction order, 9.60 entry powers, police, 9.61 event period straddling two calendar years, 9.53 function organised by club, example, 9.51 generally, 9.50 late, 9.52, 9.54 limits— hours and people, 9.50 number of events, 9.50 number of notices, 9.53 loss, 9.59 objection notice— hearing to consider, 9.56 modification, 9.57 response, 9.56 service, 9.56 personal licence holder giving, 9.65 service and acknowledgment, 9.54 standard, 9.52, 9.54 statistics— counter notices, 9.50 numbers, 9.50 withdrawal or modification, 9.50 void, where, 9.53 Tenancy adverse possession, title by, 15.3 breach, waiver, 15.12 business see Business tenancy community club, 15.5 company and club, 15.5 company club, 15.5 controlled, criminal offence, 18.28 covenants in— alcohol sales, 15.10 common, 15.9, 15.10 forfeiture, as to, 15.11, 15.12 generally, 15.6 implied, 15.7 legislation governing, 15.6 usual, 15.8 creation, 15.4 effect, 15.4 forfeiture— enforcement of right, 15.12 generally 15.11, 15.12 regulation, 15.11

571

Index Tenancy – contd forfeiture – contd relief from, 15.12 waiver of breach, 15.12 generally, 15.3–15.5 licence distinguished, 15.46 literary and scientific institution, 15.5 obligations, 15.4 residential see Residential tenancy types, 15.3 unincorporated members’ club, 15.5 Third party challenges to club decisions see Decision discrimination claims affecting livelihood, 14.15 employment see Employment liability see Third party liability Third party liability contract, in— corporate club— charitable incorporated organisation, 13.23 community club, 13.20 community interest company, 13.22 company club, 13.21 generally, 13.1 hard copy confirmation of agreement, need for, 13.1 proprietary club, 13.28 unincorporated club see Unincorporated members’ club (contract, liability to third parties) director’s liability, 13.70, 13.71 tort, in— meaning, 13.29 arising, how, 13.39 generally, 13.29 proprietary club, 13.72 unincorporated members’ club see Unincorporated members’ club (tort, liability to third parties) Torts see Defamation; Negligence; Nuisance Trust bare or simple, 8.26 care in choice of arrangements, 8.25 charitable, 8.26 classification, 8.26–8.28 generally, 8.25 legislation governing, 8.28 purpose, 8.27 special or active, 8.26 trustee— appointment, 5.19, 8.28 charity, relief from liability, 8.30 death, 8.28 indemnification, 8.30

Trust – contd trustee – contd lien over property, 8.30 maximum number, 8.28 powers and duties, 8.29 protection for, 8.30 removal, 8.28 resignation or retirement, 8.28 tenure, 8.28 underlease, grant, 8.25 U Umbrella organisation examples, 1.67 generally, 1.67 Unincorporated association ‘creature of contract’, as, 1.9 dissolution, inactivity prior to, 3.18 generally, 1.1 see also Unincorporated members’ club Unincorporated members’ club advantages, 1.8, 1.11, 1.59 amalgamation, see Amalgamation borrowing powers, 5.49 civil proceedings see under Civil proceedings contract, liability to third parties— agency— actual authority, 13.10 apparent authority, 13.10 breach of warranty of authority, 13.15 establishing, 13.10 express authority, 13.10 implied authority, 13.10, 13.11, 13.12 limits on authority, 13.12 ostensible authority, 13.10, 13.13 senior member acting as agent, 13.4 principal’s liability, 13.9 principles, application, 13.5 ratification, 13.14 role, 13.9 usual authority, 13.10 committee— dissenting committee member, 13.6 former committee member’s continuing liability, 13.8 new committee member, assumed liability, 13.7 prima facie liability, 13.5 protection, 13.19 common purpose, existence of, 13.6 credit of members, pledging, 13.12, 13.13 exclusion or restriction from club, 13.19 general principles, 13.2 legal personality, effect of lack of, 13.4

572

Index Unincorporated members’ club – contd contract, liability to third parties – contd members’ liability— approbation of club contract, 13.17 committee, protection for, 13.19 contribution, right to, 13.19 indemnity, 13.19 insurance to cover, 13.19 lien on club property, 13.19 ordinary member, 13.16 parol evidence as to real principal, 13.18 prima facie, 13.16 signature on club contract, 13.18 principals, 13.4–13.8, 13.9 ‘creature of contract’, as, 1.9, 1.10 criminal offence— criminal responsibility, law as to, 18.4 insurance, advisability, 18.10 liability, need to determine, 18.8, 18.9 prosecuting the club, 18.5 prosecuting the members, 18.7, 18.9 prosecuting the officers, 18.6, 18.10 prosecution routes, 18.3 defamation see Defamation disadvantages, 1.12 dissolution— case law, 3.17–3.20 events leading to, 3.17, 3.18 generally, 3.16 liability of members on, 3.32 requisitionists, number, 3.16 resolution, 3.16 restriction on court’s powers, 3.19 social club, 3.19 spontaneous, 3.18 voting requirements, 3.16 employment of third parties— corporate status, whether warranting change to, 16.1 see further Employment esoteric nature, 1.9 examples, 1.8 formation— criteria to be satisfied, 1.13 ease of, 1.8 resolution as to, 1.13 generally, 1.5 governance, 1.60 incorporation, whether beneficial, 1.60 insolvency— case law, 3.45–3.47 circumstances warranting, 3.44 generally, 3.44 High Court’s inherent jurisdiction, 3.46 legislation, 3.44 unregistered company, where, 3.44, 3.47 unsecured creditor seeking, 3.47

Unincorporated members’ club – contd legal identity, no separation from club members, 1.9 legal structure, summary, 1.71 Table 1 managing committee see Managing committee meetings— need for rules as to, 6.1 quorum, 6.33, 6.35 see also Meeting nuisance see Nuisance popularity, 1.8 principal, identifying, 5.57 property— beneficial ownership of assets, 8.2 bequests to club, 8.6–8.8 cy-près clause, 8.11 disposal, 8.5 dissolution, distribution on— case law, 8.12 club rule as to, 8.12 cy-près clause, 8.11 equal shares, 8.12 generally, 8.12 resulting trust, 8.12 general propositions of ownership, 8.3 perpetuity, rule against, 8.9, 8.10 single member remaining, 8.4 trust, gift made subject to, 8.8 rights and liabilities of members— committee’s disadvantage, 1.12 generally, 1.10 limits on liability, 1.11 member’s advantage, 1.11 taxation— accounts, preparation etc, 17.4 business rates, 17.47 corporation tax, 17.1 incorporation, on, 17.22, 17.23 stamp duty land tax, 17.41 see also Taxation tenancy held by, 15.5 see also Landlord and tenant; Residential tenancy tort, liability to third parties— general principles, 13.30 negligence see Negligence (liability for) nuisance see Nuisance vicarious liability see vicarious liability in tort below vicarious liability in tort— authorisation or ratification, 13.32 committee, protecting, 13.37 employee’s dishonesty or fraud, 13.34 employee’s torts, 13.33 generally, 13.32 independent contractor’s torts, 13.35, 13.36

573

Index Unincorporated members’ club – contd vicarious liability in tort – contd insurance against, 13.37, 13.38 members, protecting, 13.38 strict liability, as species of, 13.32 V VAT administration, 17.26 basic principles, 17.25 benefits to employees, 17.39 business, club as, 17.24 capital expenditure, recovery of input tax, 17.32 charities, 17.40 compliance, 17.25, 17.26 computation, 17.29 coronavirus pandemic, provision of food and drink during, 17.31 exempt supplies see taxable and exempt supplies below generally, 17.24 input tax recovery— employee benefits, 17.39 exempt supplies, 17.32 rent issues, 17.38 taxable supplies, 17.32 liability, 17.26 Making Tax Digital requirements, compliance with, 17.25 output tax on employee benefit, 17.39 payment, time for, 17.29 rate, 17.24 record keeping, 17.26 registration— cancellation, 17.27 compulsory, 17.27 generally, 17.26 voluntary, 17.28 rent, on, 17.38 return— example, 17.29 failure to submit on time, 17.29 frequency, 17.29 time for making, 17.29 special schemes, 17.30 subscriptions, on, 17.33 taxable and exempt supplies— common forms of taxable supplies, 17.37 coronavirus pandemic, temporary measure, 17.31 comparison between, 17.31 cultural services, 17.35 exempt, categories, 17.31 fund-raising events, 17.36 land, supplies as to, 17.31 partial exemption, 17.32

VAT – contd taxable and exempt supplies – contd recovery of exempt input tax, 17.32 rent form sub-lease of premsies, 17.38 sports services, 17.34 taxable supplies: meaning, 17.31 zero-rated supplies, 17.31 Visitor see Guest W Website access to, 5.99 advantages, 5.99 membership data on, 5.99 Winding up see also Insolvency compulsory, 3.23, 3.25 voluntary, 3.23, 3.24 Working men’s club meaning, 1.14 advantages, 1.15 amalgamation, 3.7 borrowing powers, 5.50 business rates, 17.47 civil proceedings by— generally, 19.13, 19.33 see also Civil proceedings community club, as— registration as, 1.14, 1.16 see also Community club company, conversion into, 1.16 constitution and objects, 2.35 contract, liability to third parties, 13.3 disputes, resolution, 1.15 dissolution— generally, 1.15, 3.20 liability of members on, 3.33 generally, 1.14 insolvency, 3.48 legal proceedings by, 1.15 legal structure, summary, 1.71 Table 1 managing committee— need for, 5.21 see also Unincorporated members’ club (managing committee, control by) powers and duties, 1.15 property, distribution on dissolution, 8.13 registration, 1.14, 1.15, 1.16 statutory authority for, 1.14, 1.15, 1.16 taxation, 17.5 tort, liability to third parties, 13.31 trustees, property vesting in, 1.15 unincorporated nature, 1.14, 1.15 Y Young persons gaming and lotteries forbidden, 12.4

574