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Associations Incorporation Amendment
Bill 2008
Introduction Print
EXPLANATORY MEMORANDUM
Clause Notes
PART 1--PRELIMINARY
Clause 1 sets out the purposes of the Bill.
Clause 2 provides that the Bill (except Parts 3 and 4) will come into
operation on the day after the day on which it receives the Royal
Assent. Part 3 and Part 4 are each to commence operation on a
day to be proclaimed or if no date has then been proclaimed, on
1 December 2011.
Part 3 changes references in the Act from public officer to
secretary, and Part 4 specifies matters that the rules of an
incorporated association must set out. A default date of
1 December 2011 has been specified in order to allow sufficient
time for the Model Rules set out in the regulations to be revised
to include the new matters and to recognise the change from
"public officer" to "secretary". This will also enable
incorporated associations sufficient lead-time to amend their own
rules to comply with the new requirements.
Clause 3 provides that the Act is referred to as the Principal Act.
PART 2--GENERAL AMENDMENTS
Clause 4 amends section 3(1) of the Principal Act by--
· inserting a definition for Council. Council will have
the same meaning as it has in section 3(1) of the Local
Government Act 1989;
561217 1 BILL LA INTRODUCTION 3/12/2008
· substituting a new definition for the term Registrar.
Registrar will mean the body corporate established
under section 38 of the Act.
Clause 5 amends section 14 A of the Principal Act by--
· inserting a new heading in section 14A;
· inserting new section 14A(1A) which provides that,
subject to the Act, an incorporated association must
not--
· exercise any power that it is prohibited by its
rules from exercising; or
· exercise any power contrary to a restriction on
the exercise of that power contained in its rules;
or
· do any act that is outside the scope of the
statement of purposes of the association;
· inserting new section 14A(1B) which provides that the
public officer or a member of the committee of an
incorporated association must not in any way be
knowingly concerned in or be a party to a contravention
by the association of proposed section 14A(1A);
· substituting the phrase "a member of the incorporated
association or the Registrar" for "or a member of the
incorporated association" in section 14A(2);
· inserting new section 14A(2)(ab) which provides that
the Magistrate's Court, on an application by a member
of an incorporated association or by the Registrar, may
make an order restraining an association from doing an
act that is outside the scope of its statement of purposes;
· inserting new section 14A(5) which provides that the
Registrar may only make an application to the
Magistrate's Court under section 14A(2) if the Registrar
is satisfied that it is in the public interest to do so.
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Clause 6 inserts new section 14C dealing with oppressive acts, which
provides that--
· a member or former member may apply to the
Magistrates' Court for an order that the incorporated
association has engaged, or proposes to engage in
oppressive conduct. An application may only be made
by a former member within 6 months of ceasing to be a
member, unless the Magistrates' Court grants leave to
apply at a later date;
· the Magistrates' Court may only grant leave to a former
member to make an application under subsection (1) if
the Magistrates' Court is satisfied that there is sufficient
public interest to do so;
· the Magistrates' Court may make one or more orders if
satisfied that the incorporated association has engaged
or proposes to engage in this conduct, including
regulating the conduct of the incorporated association's
affairs, restraining a person from doing a specified act
or thing, an order altering the rules of the incorporated
association, an order terminating or reinstating a
person's membership of the incorporated association, an
order under section 31D(2) appointing a statutory
manager and (other than an order that the incorporated
association be wound up) any other order necessary to
remedy any default or resolve any dispute;
· the Magistrates' Court must transfer a proceeding to the
Supreme Court if it has explored all possible avenues of
achieving a negotiated settlement but this has not
occurred, and it appears appropriate to make an order
winding up the incorporated association;
· if a proceeding is transferred to the Supreme Court it
may be continued and completed as if the matter had
proceeded in the Supreme Court from the outset;
· the Supreme Court may make any order that the
Magistrates' Court could have made under this section,
or make an order that the incorporated association be
wound up, but it must not make an order winding up the
incorporated association if it is of the opinion that to do
so would unfairly prejudice members affected by the
conduct of the incorporated association;
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· if the Magistrates' Court or the Supreme Court make an
order altering the rules of the incorporated association,
the alteration has effect as if it were made pursuant to a
special resolution of the incorporated association, and
the incorporated association does not have the power to
make further alterations to the rules that would be
inconsistent with the order without the permission of the
Court that made the order;
· the person who applied to the Court for the order must
lodge a copy of it with the Registrar within 14 days of it
being made; and
· for the purposes of the section, the conduct of an
incorporated association is oppressive if it is unfairly
prejudicial to, or unfairly discriminatory against, a
member of the incorporated association (including in
the member's capacity as a member of the committee) or
the conduct is contrary to the interests of the members
of the incorporated association as a whole. A reference
to engaging in oppressive conduct includes a reference
to refusing or failing to take action.
Clause 7 amends section 17 of the Principal Act by--
· inserting a new heading;
· substituting section 17(1). New section 17(1) provides
that no act of an incorporated association or conveyance
or transfer of property to or by an incorporated
association is invalid by reason only that the
incorporated association lacked the capacity or power to
so act or so convey or transfer, or because the act or
dealing was prohibited under section 14A(1A);
· inserting new section 17(1A), which provides that no
act of a person for or on behalf of an incorporated
association is invalid by reason only that it was
prohibited under section 14A(1B);
· inserts a reference to "prohibition" in section 17(2), a
reference to the Registrar in section 17(2)(a) and a
reference to an application by a member of the
incorporated association or the Registrar to wind up the
incorporated association as well as the appointment of a
person as the statutory manager of the incorporated
association in section 17(2)(c) and (d).
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Clause 8 inserts section 22(5) in the Principal Act, which enables the
Registrar to approve some, but not necessarily all, alterations to
rules, even though the alterations have been the subject of one
special resolution.
Clause 9 substitutes section 29(3) to provide that a resolution is not validly
passed as a special resolution under section 29(2) unless 21 days
notice is given specifying the intention to propose the resolution
as a special resolution, and the notice sets out the proposed
resolution in full.
Clause 10 inserts section 29D, which provides that--
· within 28 days of a person ceasing to be a member or a
holder of an office or of a role, in an incorporated
association, that person or their estate must return any
documents belonging to the incorporated association to
its committee;
· if they have not returned the documents within 28 days,
the public officer or statutory manager of the
incorporated association may make a written request for
return of the documents; and
· if they have not done so within 28 days after the request,
the Magistrates' Court may make an order on the
application of the incorporated association directing a
person, or the executor of the estate of a person, to
return the documents.
Clause 11 inserts section 30C, which provides that an auditor of an
incorporated association may only be removed from office by a
resolution at a general meeting of the incorporated association
following the procedures set out. The procedures require--
· notice to be given to every member of the incorporated
association and the auditor , stating in full the proposed
resolution; and
· a copy of the notice to be lodged with the Registrar; and
· the auditor to be allowed to make a written
representations about the proposed resolution; and
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· unless the Registrar on the application of the
incorporated association otherwise orders, a copy of a
written representation made by the auditor must be
given to all the members of the incorporated association
before the meeting at which the resolution is considered;
and
· the auditor to be allowed to attend the meeting and
address the meeting prior to the vote on the resolution.
Clause 12 inserts new Part VIIAB dealing with the administration of
incorporated associations.
Division 1 deals with the appointment by the Magistrates' Court
of a statutory manager to conduct the affairs of an incorporated
association.
· Section 31D provides that the Registrar may apply to
the Magistrates' Court for the appointment of a statutory
manager, and the Magistrates' Court may appoint a
person on such terms and conditions as it determines.
The Magistrates' Court must not appoint a statutory
manager unless the Registrar certifies that, following an
investigation into the affairs of the incorporated
association, it is in the interests of the incorporated
association's members, its creditors or the public, that a
statutory manager be appointed.
· Section 31E provides that on the appointment of a
statutory manager--
· the committee members cease to hold office;
· the statutory manager has the functions of the
incorporated association; and
· a committee member can only be appointed or
elected while the statutory manager is in office in
accordance with Part VIIAB.
· Section 31F outlines the powers of the statutory
manager. It provides that the statutory manager of an
incorporated association--
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· has control of, and may manage, the property and
affairs of the incorporated association;
· may dispose of all or part of the property of the
incorporated association;
· may engage or discharge employees on behalf of
the incorporated association;
· may perform any function and exercise any
power that could, were the incorporated
association not under statutory management, be
performed or exercised by the incorporated
association, any officer of the incorporated
association or the members of the incorporated
association; and
· may perform any function and exercise any
power the incorporated association has as trustee.
· Section 31G provides that--
· the statutory manager holds office until their
appointment is revoked by the Magistrates'
Court, the incorporation of the incorporated
association is cancelled under section 36EC or
a liquidator is appointed by the Supreme Court;
· immediately upon revocation, the statutory
manager must prepare a report for the Registrar
about the statutory management, and the
statutory manager is thereafter released from
any further duty to account on the statutory
management, other than in the circumstances
set out in section 31G(6);
· the Registrar may provide a copy of the statutory
managers' report to the incorporated association;
· where the Magistrates' Court revokes the
appointment of a statutory manager, it must
either appoint another statutory manager, or
ensure that there is a committee to take over the
statutory management of the incorporated
association. The committee may have been
elected under the rules of the incorporated
association at a meeting convened by the
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statutory manager, or appointed by the Registrar,
and holds office until the next annual general
meeting of the incorporated association.
· Section 31H provides that--
· the statutory manager may defray the expenses
of and incidental to the statutory management
from the funds of the incorporated association;
· the Magistrates' Court oversees the remuneration
of the statutory manager, which is one of the
expenses of the statutory management; and
· in relation to the expenses of and incidental to
the statutory management of the incorporated
association, the statutory manager has the same
priority on the winding up of the incorporated
association as the liquidator of the incorporated
association.
· Section 31I provides that the statutory manager is liable
for any loss incurred by the incorporated association in
the circumstances set out in section 31H(1), and that
the statutory manager is not liable for any other loss
incurred by the incorporated association but must
account for the loss in a report to the Registrar.
· Section 31J provides that if requested by the Registrar,
the statutory manager must give the Registrar a report
showing how the statutory management is being carried
out. The Registrar may give a copy of this report to the
incorporated association.
· Section 31K provides the Registrar with additional
powers in relation to an incorporated association that is
being administered under this Division.
Where the Registrar has appointed committee members
under proposed section 31G(8), the Registrar may
specify the terms and conditions on which the
committee members hold office, the period for which
the terms and conditions and rules apply and, with the
consent of the Magistrates' Court, the rules that are to be
the rules of the incorporated association.
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The Registrar may remove and appoint committee
members, change their terms and conditions and, with
the consent of the Magistrates' Court, amend any or all
of the rules during this period.
Where the Registrar has specified a rule, it can only be
altered during this period by the Registrar, and to the
extent that it is inconsistent with any other rule of the
incorporated association, it prevails.
· Section 31L provides that if the Magistrates' Court has
appointed a statutory manager, a person cannot continue
or commence proceedings against the incorporated
association during the term of the statutory management
without the leave of the Magistrates' Court, and if leave
is granted, except on the terms and conditions imposed
by the Magistrates' Court. The Registrar must be given
at least 10 days notice of the intention to apply for
leave, and the Registrar may oppose the application.
Inserts new part VIIAC which provides for the voluntary
administration of an incorporated association under Part 5.3A of
the Corporations Act.
· Section 31M provides that the voluntary administration
of an incorporated association is declared to be an
applied Corporations legislation matter for the purposes
of Part 3 of the Corporations (Ancillary Provisions)
Act 2001 in relation to Part 5.3A and Division 3 of
Part 5.9 of the Corporations Act.
· Part 5.3A and Division 3 of Part 5.9 are applied as part
of the Principal Act, subject to the modifications set out
in section 31M(2), and any other modifications that may
be prescribed.
Clause 13 repeals sections 32, 33A to 33E. These sections deal with the
distribution of surplus assets. This matter is now covered by new
Division 3A of Part VIII (see clause 15 below).
Clause 14 inserts a reference to the statutory manager of the incorporated
association in section 34(2)(c) of the Principal Act, enabling the
statutory manager to make an application to the Supreme Court
for the winding up of the incorporated association.
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Clause 15 inserts new Division 3A in Part VIII, which regulates the
distribution of surplus assets on the winding up of an
incorporated association.
· Section 36CA provides that--
· surplus assets are those assets remaining after the
satisfaction of debts and liabilities of the
incorporated association, and the costs, charges
and expenses of its winding up. Subsection
36CA(5) provides that on the winding up of an
incorporated association, surplus assets are to be
distributed in accordance with the rules of the
incorporated association, or if there are no valid
rules about this, then in accordance with a
special resolution of the incorporated association.
· However--
· the surplus assets of an incorporated association
that is in the process of winding up may be
distributed to a member or former member if--
· the member or former member is a body
corporate (whether incorporated or not)
and the Registrar is satisfied that at the
time of the distribution, the member or
former member is prevented by its rules
or otherwise from distributing the surplus
assets to its members; or
· the member or former member is a trustee
who holds, or held, membership of the
incorporated association on behalf of a
trust and the Registrar is satisfied that at
the time of the distribution, the trustee is
prevented by the terms of the trust or
otherwise from distributing the surplus
assets to beneficiaries of the trust; and
· the distribution is not contrary to this Act
or regulations; and
· any part of the surplus assets that is property
(including the unexpended portion of a grant)
supplied to the incorporated association by a
government department, Council or public
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authority must be returned to the government
department, Council or public authority or a
body it nominates.
· The Registrar, a liquidator, member or any person
aggrieved by the operation of this Division may apply to
the Supreme Court for an order relating to the
distribution of surplus assets. In making an order, the
Supreme Court must have regard to any relevant rules
and purposes of the incorporated association.
· Section 36CA(8) prevents section 36CA from
displacing any trust affecting all or any of the assets of
the incorporated association.
Clause 16 inserts a heading for Subdivision 1 of Division 5 of Part VIII of
the Principal Act.
Clause 17 substitutes section 36E(7) of the Principal Act. New section
36E(7) refers simply to any person who has a liability incurred by
virtue of their role or membership in the incorporated association.
The previous section referred to the public officer, any member
of the committee or any member of the association. This change
is made as part of the change from public officer to secretary.
Clause 18 inserts new Subdivision 2 in Division 5 of Part VIII of the
Principal Act, which sets out a procedure for the voluntary
cancellation of certain incorporated associations.
· Section 36EA(1) provides that an application may be
made to the Registrar to cancel the incorporation of an
incorporated association where that incorporated
association--
· has gross assets of less than $10 000 or other
prescribed amount;
· has no outstanding debts or liabilities;
· has paid all fees and penalties under the Principal
Act; and
· is not a party to any legal proceedings.
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· Section 36EA(2) provides that the application may only
be made--
· by an incorporated association if the
incorporated association has passed a special
resolution agreeing to seek cancellation under
this section;
· by a statutory manager appointed under
section 31D;
· by an administrator of the incorporated
association appointed under voluntary
procedures under Part VIIAC; or
· if the incorporated association is not in operation,
by one of its members or former members.
· Section 36EA(3) provides that the Registrar must be
satisfied that the incorporated association is not in
operation before accepting an application from a
member or former member.
· Section 36EA(5) provides that the application must
include a declaration by the applicant setting out why
the applicant has formed a view that the incorporation
should be cancelled, that all of the matters in section
36EA(1) exist, that the applicant is qualified under
section 36EA(2) to make the application, and, where the
applicant is a member or former member, that the
incorporated association is not in operation.
· Section 36EB provides that the Registrar may make
further inquiries regarding the information provided in
the declaration under section 36EA(5) required to
establish the validity of that information.
· Section 36EC provides that the Registrar must publish a
notice in the Government Gazette and a newspaper
stating that the application has been received, and that
unless a person makes an objection within 28 days of
the publication, the incorporation will be cancelled.
If an objection is received the Registrar must not cancel
the incorporation unless after making further inquiries
the Registrar is satisfied of the validity of the
information provided under section 36EA.
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Otherwise, if satisfied that the circumstances in
section 36EA exist, the Registrar must cancel the
incorporation of the incorporated association, and
advise the applicant.
· Section 36EC(5) preserves the liabilities of persons
incurred by virtue of their role in or membership of the
incorporated association.
Clause 19 inserts a heading for Subdivision 3 of Division 5 of Part VIII.
Clause 20 substitutes "Subdivision 1" for "this Division" in section 36F, as
Division 5 now has 3 subdivisions.
Clause 21 substitutes section 37A of the Principal Act to add a definition of
Director for the purposes of Part VIIIA.
Clause 22 substitutes section 38 in the Principal Act to provide that the
Registrar of Incorporated Associations is a body corporate with
perpetual succession, an official seal and may sue and be sued.
Previously the Registrar was an individual. This change
facilitates the Registrar holding property vested under
section 36F. The Registrar may also by instrument delegate any
of the Registrar's powers and functions under this Act, other than
the power of delegation, to any person employed under Part 3 of
the Public Administration Act 2004.
Clause 23 substitutes references to "statements" and "statement" for
"returns" and "return" in sections 39(1A) and 39(1B) of the
Principal Act, which are the expressions used elsewhere in the
Principal Act.
Clause 24 inserts subsection 42(2) in the Principal Act. Section 42(1)
provides that an incorporated association or guarantor of an
incorporated association may not assert against a person dealing
with the incorporated association or with any person who has
acquired rights from the incorporated association that the rules
have not been complied with, or that the person last notified to
the Registrar as the secretary or public officer of the incorporated
association was not the secretary or public officer. Section 42(2)
provides that the incorporated association or guarantor may make
such an assertion where the person dealing with the incorporated
association or who has acquired rights from the incorporated
association has actual knowledge, or ought to have knowledge by
reason of their connection or relationship with the incorporated
association, of the matter asserted.
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Clause 25 inserts sections 46(2) to (6) in the Principal Act dealing with the
lodgement with the Registrar of incorrect documents.
· Section 46(2) provides that the Registrar may refuse to
register or receive a document if the Registrar is of the
opinion that the document is not a valid document of the
incorporated association.
· Section 46(3) provides that if the Registrar refuses
under (2) to register or receive a document, the
incorporated association may request that the Registrar
reconsider the refusal and may provide to the Registrar
any documents in support of the request.
· Section 46(4) provides that the Registrar must refer the
question of whether or not the document is valid to the
Magistrates' Court if--
· the incorporated association has requested under
(3) that the Registrar reconsider a refusal to
register or receive the document;
· the Registrar remains of the opinion that the
document is not a valid document; and
· the incorporated association requests that the
Registrar refer the question of whether or not the
document is valid to the Magistrates' Court.
· Sections 46(5) and (6) provide that the Magistrates'
Court may make an order about the validity of the
document and, if the order is that the document is valid,
the Registrar must register the document.
Clause 26 substitutes section 49A of the Principal Act to remove references
to "public officer" as part of the change in the Act from "pubic
officer" to "secretary".
Clause 27 inserts new sections 53B and 53C after section 53A of the
Principal Act.
· Proposed section 53B provides that in any proceedings
under this Act, the Magistrates' Court may, on its own
initiative or on application by a party to the proceeding,
transfer the proceeding to the Supreme Court on the
ground that the proceeding raises a complex question or
matter of general importance or reserve a question of
law for determination by the Supreme Court. If a
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proceeding has been transferred to the Supreme Court
under (1)(a), it may be continued and completed if steps
taken in the proceeding prior to the transfer had been
taken in the Supreme Court.
· Proposed section 53C provides that a person who is or
has been the auditor, statutory manager or administrator
of an incorporated association has qualified privilege in
respect of a statement made by the person, whether
orally or in writing, in the course of performing any
functions or exercising any powers as the auditor,
statutory manager or administrator, as the case may be,
of the incorporated association.
Clause 28 amends sections of the Principal Act to substitute gender specific
references with gender-neutral references.
Clause 29 repeals section 55(1) of the Principal Act, which is a spent
transitional provision.
Clause 30 inserts section 56 in the Principal Act, which is a transitional
provision which recognises the Registrar under section 38 as
substituted by clause 22; and which provides that section 36CA
does not apply to an incorporated association that immediately
before the commencement of clauses 13 and 15 of this Act had a
rule that permitted the distribution of surplus assets to its
members on a voluntary winding up.
PART 3--PUBLIC OFFICER
Clause 31 amends section 3(1) of the Principal Act to substitute a new
definition for public officer, the new definition referring to the
pubic officer before the commencement of this Part, and inserts a
definition of secretary.
Clause 32 amends sections of the Principal Act to substitute references to
"secretary" for "public officer", add references to "secretary" or
delete references to "public officer" as appropriate.
Clause 33 inserts a heading in section 42 of the Principal Act, and
substitutes new sections 42(1)(b) and (c) for current section
42(1)(b) to recognise the change from "public officer" to
"secretary" in the Principal Act.
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Clause 34 inserts sections 56(6) and 56(7) in the Principal Act to--
· deem the public officer at the commencement of this
Part to be the secretary of the incorporated association
until a secretary is appointed at the next annual general
meeting of the incorporated association;
· provide that section 17(2)(b) of the Principal Act only
applies to a secretary (other than the deemed secretary
above) appointed after the commencement of this Part.
This ensures that a person acting as a secretary in an
incorporated association who is not the public officer is
not affected by section 17(2)(b) after its amendment
by this Part, and preserves the intended operation of
section 17(2)(b);
· preserves the authenticity of a document authenticated
by a public officer under section 19(6) before the
commencement of this Part; and
· provides that the secretary may continue and complete
any continuing act or thing commenced by or the public
officer or against the public officer before the
commencement of this Part.
PART 4--RULES OF AN INCORPORATED ASSOCIATION
Clause 35 sets out additional matters to be provided for in the rules of
incorporated associations.
PART 5--REPEAL OF AMENDING ACT
Clause 36 provides for the automatic repeal of this amending Act on
1 December 2012. The repeal of this Act does not affect in any
way the operation of the amendments made by this Act (see
section 15(1) of the Interpretation of Legislation Act 1984).
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