Associations Incorporation and Other Legislation Amendment Bill 2019

 The second reading of the Associations Incorporation and Other Legislation Amendment Bill 2019 (“Bill”) has been included in the order of business of the Queensland Parliament on 16 June 2020. The Bill has been through the Committee stage and carries the Committee’s recommendation that it be passed.

The policy objectives of the Bill are to:

clarify the operation of the Associations Incorporation Act 1981 (“AI Act”);

• improve the internal governance of incorporated associations;
• reduce regulatory burden for incorporated associations and charitable entities; and
• streamline, enhance or otherwise improve government processes.

 The Bill comprises 76 pages and is a culmination of work predominantly undertaken through two discussion papers released in 2010 and 2012. The more salient features of the Bill are:

1.  all incorporated associations (Association) must abide by a set of operating rules. Those rules can be developed by the Association, pursuant to the AI Act and AI Regulation or by adopting the “model rules” from the AI Regulation. Where the Association’s rules do not provide for a matter which is provided for in the model rules (additional provision) the Association’s rules are taken to include the additional provision. This does not apply if the rules of the Association provide otherwise in which case the rules of the Association apply except for those rules which the AI Act mandates e.g. grievance procedure discussed at item 2 below.;
2. the rules of an Association may set out a grievance procedure for dealing with any dispute between:
   1. a member and another member; or
   2. a member and the management committee; or
   3. a member and the Association.

Where the Association’s rules do not provide a grievance procedure the procedure set forth in the AI Act shall apply. When the Bill is passed Associations should familiarise themselves with the grievance procedures in the AI Act or seek to amend their rules to include grievance procedures which must not be inconsistent with the AI Act;

3. Associations may hold general meetings using any technology which reasonably allows members to hear and take part in discussions irrespective of whether such provision is included in the Association’s rules i.e. there is no obligation on the Association to amend its rules to include such provision;
4. a member of the management committee of the Association who has a material personal interest in a matter being considered at a management committee meeting must, as soon as possible after he or she becomes aware of the interest, disclose the nature and extent of interest to the management committee and must disclose the nature and extent of the interest at the next general meeting of the Association. Such member must not be present while the matter is being considered at the meeting or vote on the matter;
5. the members of the management committee of an Association must ensure “the prescribed details of the remuneration paid or other benefits given for the financial year” to:
   1. each member of the management committee;
   2. each senior staff member of the Association;
   3. each relative of a person mentioned in paragraph (a) or (b);

are presented to the Association’s annual general meeting in accordance with the prescribed regulation. It is expected that the regulation will provide that such information may be disclosed in the aggregate/s rather than for each member of the management committee or senior staff member;

6. officers of an Association must act in good faith in the best interests of the Association and for a proper purpose. Officers must not improperly use their position to gain, directly or indirectly, a pecuniary benefit or material advantage for an officer or another person or cause detriment to the Association;
7. a person who was a member of the management committee or took part in the management of an Association, at the time the Association incurred a debt commits an offence if:
   1. the Association was insolvent at the time the debt was incurred or becomes insolvent by incurring that debt; and
   2. immediately before the debt was incurred there were reasonable grounds to expect that the Association was insolvent or if the Association incurred the debt, the Association would become insolvent. This effectively reverses the onus of proof unless the member of the management committee proves one or more of the defences contained in the AI Act;
8. in certain circumstances an Association may be wound up voluntarily if the Association so resolves by special resolution without the requirement of applying to the Supreme Court;
9. the burden of financial reporting is relieved for an “exempt” Association prescribed by regulation. It is envisaged that an Association which is also registered pursuant to the Australian Charities and Not-For-Profits Commission Act 2012 (ACNC Act) will be an “exempt” Association if its financial statements are lodged with the ACNC;
10. the Bill also expands the investigative powers of the AI Act by incorporating the powers of an inspector under the Fair Trading Inspectors Act 2014.

As would be expected of a Bill comprising 76 pages there are a number of other amendments which have not been highlighted and because of the need for brevity even those dealt with have not been fully or comprehensively canvassed. Accordingly, when the Bill is passed into law, Associations, particularly through their members of the management committee, should fully familiarise themselves with the new provisions and to the extent necessary take legal advice for the purpose of compliance and risk management.

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).

This article was authored by Greg Moroney when he was still an employee of Bennett & Philp Lawyers.