## Facts

- The Sick and Funeral Society of St John’s Sunday School, Golcar was established as a friendly society to provide its members with financial assistance for sickness and funeral expenses.
- Members contributed regular payments, which the society accumulated over time.
- Upon dissolution of the society, surplus funds remained after settling all debts.
- The society’s rules did not specify how leftover funds should be distributed following dissolution.
- The central issue arose regarding whether the surplus should be distributed among current members or returned to all contributors under a resulting trust.

## Issues

1. Whether leftover funds from a dissolved friendly society, in the absence of clear rules, should be distributed to the current members or held on a resulting trust for contributors.
2. Whether the nature of members’ contributions constituted gifts to the society or were made for specific purposes under a trust.
3. How the absence of express rules regarding surplus funds affects legal entitlements on dissolution.

## Decision

- The court determined that the leftover funds could not be treated as ownerless property and must be held on a resulting trust for the contributors.
- It was found that contributions by members were not gifts but payments made for defined purposes (sickness and funeral benefits), which had been fulfilled.
- The court rejected distribution solely to members at dissolution, concluding that such an approach would unfairly benefit current members at the expense of original contributors.
- The absence of specific rules about surplus funds meant equity required protection of the contributors’ rights through a resulting trust.

## Legal Principles

- Where a trust fails or lacks express provision for surplus funds, property is subject to a resulting trust, reverting to the original contributors.
- Resulting trusts ensure property is not ownerless and uphold fairness among all contributors, not just those present at dissolution.
- A distinction exists between automatic resulting trusts (arising upon failure of an express trust) and presumed resulting trusts (arising absent consideration and absent evidence of gift).
- The society’s governing rules are essential; in their absence, equitable principles determine entitlement to surplus funds.
- Clear documentation regarding the fate of surplus funds can prevent disputes upon dissolution of associations.

## Conclusion

The court in Re Sick and Funeral Society of St John’s Sunday School, Golcar [1973] Ch 51 held that in the absence of explicit rules, surplus funds remaining after a society’s dissolution are held on resulting trust for contributors, not solely distributable among current members, affirming the importance of tracking contributions and providing certainty in the dissolution of unincorporated associations.


Re Sick and Funeral Society of St John's Sunday School, Golcar [1973] Ch 51