The origins of small sports and social clubs are often shrouded in the mists of time and, if they cease to function, issues can arise as to what should be done with their assets. In the case of a defunct railway workers’ club, the High Court delivered a substantial financial windfall to its former members and their heirs.
The date on which the club was founded by three train drivers was unclear, although it was apparently some time before 1986. It occupied two plots of land, measuring a total of 8.3 hectares, which the three had bought from the local authority and the British Railways Board. Interest in the club petered out, however, and its former clubhouse now stood empty and badly vandalised.
Various people with connections to the club, including the executor of the estate of one of the founders and the daughter of another, launched proceedings seeking an order for the sale of the plots – one of which had been valued at £380,000 – and directions in respect of the distribution of the proceeds of sale.
Ruling on the matter, the Court noted that the land was clearly held on some sort of trust or trusts, but their nature and terms were uncertain and confused. The club’s founders were all deceased but a search through the papers of one of them had revealed a rudimentary constitution and other documents concerning the club’s rules and governance.
Membership of the club was originally restricted to British Rail employees but, by a deed executed in 1997, any resident of the surrounding neighbourhood was permitted to join. The Court, however, found that that extension did not render the club a charity. The benefit of its facilities was restricted to its membership and new members were subject to the approval of the club’s committee. Its objectives could thus not be viewed as exclusively charitable.
Noting the derelict state of the clubhouse, and that no membership dues had been paid for some years, the Court found that the club was dissolved in March 2013 and that the land – its only substantial asset – should be sold.
The trusts on which the land was held were governed by the deed and the proceeds of sale stood to be distributed equally between those who were members of the club on the date of its dissolution, or their heirs. Twenty-five potential beneficiaries of the distribution had to date been identified, but the Court directed that steps be taken to encourage others to come forward.
