Page 2617 - Week 07 - Tuesday, 28 June 2011
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constitution without the members of the club having any say in the matter. In our briefing, we raised concerns with this section. We were assured that there was no issue with this approach, for a number of reasons. The proposal is defined very narrowly and restricts the ways in which the commission could take action under the section and, as the commission conducts regular reviews of club documentation, it is reasonable for the commission to take this action, if it finds an issue in a club’s documentation, before a difficulty arises.
Whilst this may very well be so, the fundamental concern remains. The proposal would permit an outside entity, the commission, to direct a club to alter its constitution without the club’s members initially being involved. We do not agree that this is a reasonable position to adopt. This proposition denies the members of a club the right to amend their own constitution as they wish.
Further to this, however, is the legal advice which has been prepared for one ACT club in response to this proposed section. What does this advice say? The advice makes a number of comments. First, in relation to the relationship between the ACT’s proposed section 53B and the commonwealth’s Corporations Law, section 53B “relies on … section 5G of the Commonwealth’s corporations law to be effective”. The clear intent of the Corporations Law, through section 5G and its explanatory memorandum, is to “permit greater protection for members or greater controls but not eroding of their rights as a voting member”. We see:
… it is not the intention of the provisions of the [corporations law] to permit blatant overriding of members’ rights, well established in both common law and under legislation.
I think the advice is quite clear. Yes, the commonwealth’s Corporations Law does deal with the matters which are raised by the proposal for section 53B but, no, the intent of the Corporations Law is the opposite to the actions which would be permitted by section 53B. This means that the Corporations Law needs to be read such that any actions being contemplated by a state or territory can strengthen the position of members of a corporation, in this case read club, in the ACT context.
A state or territory cannot consider, however, any action which erodes the rights of voting members, and yet that is precisely what section 53B does. This section permits the commission to direct that a constitution be amended without the members being involved, and that position is simply not satisfactory.
It also is pertinent to consider the question of precedents in how section 53B might be applied. While any precedents relate to the actions of corporations, the legal advice notes that there are no examples where section 5G has been used to direct a company to amend a constitution without an election of the voting members of a company. It would appear to be mischievous, therefore, for the government to suggest that section 53B is a legitimate approach to reducing the powers of voting members of a club. Based on these very serious and fundamental concerns, I will be moving that section 53B be omitted from the bill.
The second area of concern relates to proposed section 148A. Section 148A is almost taken word for word from the commonwealth’s Corporations Law. The only
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